German chems warn against additional costs ahead of energy summit

19 March 2013 15:36  [Source: ICIS news]

LONDON (ICIS)--German chemical and industrial firms on Tuesday cautioned the country's leaders not to impose additional energy costs on producers.

Chemical producers’ group VCI, alongside trade groups representing energy-intensive industries such as steel and glass, issued the warning in a joint statement ahead of this week’s German energy summit between federal and state governments.

VCI general manager Utz Tillmann pointed in particular to a recent proposal by Germany’s industry and environment ministers that would impose an additional €700m ($909m) charge on energy-intensive producers to help subsidise the further development of the renewables sector, he said.

“Any additional cost burden on energy-intensive producers will put investments [in Germany] into question,” given that many industrial producers in Europe and elsewhere benefit from significantly lower energy prices than producers based in Germany, Tillmann said.

“We want to keep production in Germany and want to continue investing here,” Tillmann said.

In order to do so and stay internationally competitive, chemical and other producers needed to have access to reliable, clean and affordable energy, he added.

Hans Jurgen Kerkhoff, spokesman for Germany’s steel industry trade group Wirtschaftsvereinigung Stahl, said that under the country's energy policies, renewables enjoyed a 20-year guaranteed return on investments, while at the same time investment prospects for energy-intensive producers were becoming worse.

“Our politicians must take urgent action to finally correct this colossal mismatch,” Kerkhoff said.

Under German regulations, electricity consumers pay a surcharge, known as “EEG-Umlage”, to subsidise renewable. Germany’s chemical industry will have to pay some €800m in electricity surcharges this year alone to help subsidise renewables, according to information on VCI’s website.

Germany aims to phase our all nuclear power generation by 2022 while further building out its renewable energy sector.

($1 = €0.77)

By: Stefan Baumgarten
+1 713 525 2653

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