Germany chems welcome compromise with EU over electricity surcharges

08 April 2014 17:57  [Source: ICIS news]

LONDON (ICIS)--Germany’s chemical industry on Tuesday welcomed a compromise between Berlin and the European Commission over the country's complex system of subsidising the build-up of renewable energy.

Economics minister Sigmar Gabriel earlier on Tuesday announced the compromise that addresses Commission concerns over exemptions Berlin grants chemical and other energy-intensive industrial producers from surcharges (“EEG Umlage”) it levies on electricity consumers.

The EEG Umlage helps fund the build-up of renewables. The Commission was probing the exemptions for their compatibility with EU competition law.

In a webcast media briefing, Gabriel said Berlin would apply stricter criteria in granting the exemptions, thus ensuring only energy-intensive producers that are exposed to international competition benefit.

Currently, some 2,100 firms are exempted. As part of the compromise, that number will be reduced by about 500 while the remaining industrial producers will continue to benefit from exemptions, Gabriel said.

Gabriel rejected suggestions that Berlin was protecting industry while leaving consumers to pay for Germany’s costly energy transition (“Energiewende”) to renewables.

“I am protecting jobs, that’s my job,” he said in a separate interview on Germany’s state television. “We are talking about hundreds of thousands of jobs,” he added.

Germany needed to ensure that energy-intensive industrial producers such as chemicals, cement, steel, copper and aluminium remain internationally competitive with the US and other countries where energy prices are much lower, he said.

“Others in Europe are talking about re-industrialisation, so [Germany] should do it’s best to maintain its industrial jobs,” he added.

Also, Germany managed to cope much better in the aftermath of the 2008/2009 global financial and economic crisis than others because of its industrial base, the minister said.

Utz Tillmann, general manager of Frankfurt-based German chemical producers’ trade group VCI, said that chemical firms welcomed the compromise Gabriel reached with the EU.

“This is a big political success for Germany as a site for chemical production,” Tillmann said.

Without the exemptions, Germany-based chemical producers would be facing huge cost increases, jeopardising their international competitiveness, he added.

In particular, Tillmann welcomed that under the latest draft legislation, chemical producers will continue to be exempted from the surcharges for electricity they produce onsite for their own use.

By: Stefan Baumgarten
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