Germany’s VCI criticises key aspects of Green Party manifesto for September poll

Author: Stefan Baumgarten

2021/03/24

LONDON (ICIS)--Germany’s chemical producers trade group VCI criticised this week key aspects of the Green Party’s proposed platform for the country's upcoming September federal elections.

VCI outlined 10 critical areas on which it wants the next government to focus in order to strengthen the country as a hub for chemicals and pharmaceuticals production.

The Green Party - “Bundnis 90/Die Grunen” - has done well in recent opinion polls and state elections; it stands a good chance of becoming part of the next federal government.

It currently participates in coalition governments in 11 of Germany’s 16 states, and it has been leading the government of the prosperous Baden-Wurttemberg state for the past 10 years.

One of their co-leaders - Annalena Baerbock or Robert Habeck - may even succeed Angela Merkel, who will step down as chancellor after more than 15 years.

The Green’s draft platform for the election, published last week,  contains a number of plans and objectives that would, if implemented, affect chemical producers:

- A cut in greenhouse gas emissions (GHG) in Germany by 70% by 2030, from 1990 levels - instead of the current target of 55% by 2030
- Raising Germany’s carbon tax to €60/tonne of carbon dioxide (CO2) by as early as 2023
- “Border adjustment” tariffs on imports, to account for CO2 costs and ensure “fair competition"
- A broad call to end “the flood of plastic wastes”
- Mandatory deposit payments on plastic bottles
- Additional bans and restriction on the use of “poisonous chemicals” in consumer products and toys, and tighter rules for permitting crop chemicals
- Non-ratification of the EU’s free trade agreement with Canada in its current version, and opposition to the EU’s “environmentally damaging” Mercosur trade deal with Argentina, Brazil, Paraguay and Uruguay
- Stopping the nearly completed Nord Stream 2 natural gas pipeline project from Russia
- A push for a comprehensive and tough European supply chain law
- Driving forward "green digitalization"
- Additional €50bn/year in public investments, for the next 10 years
- Research investment of “at least” 3.5% of GDP

'LARGELY UNSUITABLE'  
VCI said that from the chemical industry’s point of view, the Greens manifesto included many goals worth supporting - such as climate protection, biodiversity and social cohesion, investment in research, or building up the digital infrastructure.

However, on balance, VCI considers the recipes and solutions the Greens propose to achieve their goals “to be largely unsuitable, because they damage the economic basis”, threatening and overtaxing Germany’s many small and medium-sized chemical producers, it said.

The call for a 70% emissions reduction by 2030 did not address how chemical and other energy-intensive industrial producers can obtain affordable green electricity, in sufficient volumes, VCI said.

In order to meet the “enormous challenges” posed by climate change and the energy transition toward renewables, the country needed “intelligent solutions” and political support and tailwind – not new hurdles, taxes and breaking blocks, said VCI director general Wolfgang Grosse Entrup.

The Greens' programme was claiming to be a “courageous and future-oriented policy”, he said.

However, with the recipes and solutions the party proposes – product bans, restrictions, price increases, taxes or calls to exit certain production sectors - “one can only dream” that their ecological transformation could be successful, he said.

VCI, for its part, said Germany’s next government needed to take action in the following 10 key areas:

- Making energy greener and cheaper
- Driving progress through innovation
- Strengthening Germany as a location for the pharmaceutical industry
- Modernising and speeding up project approval procedures and making them “legally secure”
- Strengthen small and medium-sized firms by reducing red tape
- Using the EU Green Deal and the EU chemicals strategy to boost Germany’s competitiveness
- Improving digitalization and infrastructure
- Securing high-quality nutrition with modern agriculture
- Advocating for free trade
- Improving the tax system to ensure firms can compete internationally

“As the chemical and pharmaceutical industry, we clearly state what we need - and what is good for Germany,” said VCI’s Grosse Entrup.

“The election campaign offers the chance to re-discuss those priorities in order to shape a good future for Germany," he said.

Frankfurt-based VCI represents around 1,700 chemicals and pharmaceuticals companies that have activities in Germany.