Germany’s electricity levy to fall in 2022, chem sector seeks abolition

LONDON (ICIS)–Germany’s electricity price surcharge to help fund the transition to renewable energies will be 3.7 euro cent per kilowatt hour in 2022, down from 6.5 cent in 2021, the country’s electricity transmission systems operators announced on Friday.

At 3.7 euro cent, the surcharge, known as “EEG-Umlage”, will be at its lowest level in 10 years.

However, chemical producers group VCI said the reduction did not provide much relief for most companies amid soaring electricity prices in Germany and elsewhere in Europe.

“Whatever companies are saving with the reduction in the surcharge, they will end up paying much more because of the massive increases in electricity prices”, VCI director general Wolfgang Grosse-Entrup said.

He reiterated VCI’s call on the yet to be formed new German government to abolish the surcharge.

Electricity prices were “the decisive lever” for investments in climate protection, especially in industry.

To ensure new, climate-friendly production processes, Germany needed an industrial electricity price of 4 euro cents, he said.

While larger energy-intensive chemical and other industrial producers are largely exempted from the surcharge, abolishing it would help the many medium and small-sized chemical producers to dampen their rising costs, he added.

COALITION TALKS
Meanwhile, the chemical industry keeps watching closely as the main political parties are seeking to form a new coalition government.

Three weeks after September’s inconclusive federal elections, there was finally some progress on Friday.

Three parties – the Social Democrats, the liberal FDP party, and the Greens – presented a “consultation paper” that will be the basis for negotiating a new coalition government over the coming weeks.

In the paper, the parties noted that as part of reforms needed within the context of the EU’s “Fit for 55” programme, they would seek to abolish the financing of the EEG-Umlage via electricity prices “as soon as possible”.

However, the uncertainty over who will lead Europe’s largest economy continues. Following the previous election in 2017, it took nearly six months to form a new government.

Front page picture: A transformer station outside Berlin
Source: Felipe Trueba/EPA-EFE/Shutterstock

Additional reporting by Jonathan Lopez