Germany chems disappointed with government move on electricity costs

29 January 2013 20:17  [Source: ICIS news]

LONDON (ICIS)--Germany’s chemical industry is disappointed with proposals by the country’s environment minister to curb renewable electricity surcharges that electricity consumers have to pay to help subsidise the expansion of the renewable energy sector, a trade group said on Tuesday.

Minister Peter Altmaier this week proposed freezing the surcharge, known as “EEG-Umlage”, at 5.28 euro cents/kWh for two years. After that, increases in the surcharge would be limited to 2.5%/year.

However, Karl-Ludwig Kley, president of Germany’s chemical producers’ trade association VCI, said that Altmaier’s proposals would only defer the problem, rather than address what he called “an explosion in electricity costs that could trigger an implosion of [Germany’s] industrial value-added chain.”

Kley stressed the role that energy-intensive chemical production plays for Germany’s export-based economy. In particular Germany’s many small and medium-sized chemical producers had been looking for a genuine relief in electricity costs, rather than a two-year deferral, he said.

VCI general manager Utz Tillmann added that Germany-based energy-intensive industrial producers such as chemicals are facing tough competition from within and outside the EU.

In order to boost investments and secure jobs, producers needed a “genuine brake” on electricity costs, Tillmann said.

VCI estimates that the country’s chemical industry will have to pay some €800m ($1.08bn) in electricity surcharges this year alone to help subsidise renewables, according to information on the group’s website.

Minister Altmaier aims to have his proposals passed into law by 1 August, before a federal election.

However, Chancellor Angela Merkel’s ruling coalition government does not have a majority in the upper house, the Bundesrat, where opposition parties could therefore block the proposals, commentators said.

($1 = €0.74)

By: Stefan Baumgarten
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