Emissions trading will burden industry with billions of euros

EU plans - A disastrous blow to the energy-intensive industry

If the plans of the EU Commission for emissions trading are implemented without any changes, the energy-intensive industry in Germany will be faced with an immense avalanche of costs. Production costs for industries manufacturing construction materials, glass, chemicals, paper, metals and steel would rise by just under 4 billion euros p.a. from 2013. This burden would increase to over 7.2 billion euros p.a. by 2020, so that companies could no longer compete internationally.

For this reason, delegates from energy-intensive industries jointly demanded today in Brussels a free allocation of allowances for operating their installations as well as compensation for rising electricity prices. They called for relevant decisions now within the amendment of the Emissions Trading Directive, in order to provide planning security for companies. Ulrich Lehner, President of the German Chemical Industry Association (VCI), sums up the gloomy prospects: "If the proposal from the Commission for emissions trading is adopted without any changes, a de-industrialization of Germany cannot be stopped." According to Lehner, this applies also for other European countries. He continues: "We urge the European Parliament and the Council not to allow this disastrous blow."

All this must be seen in connection with the competitive situation of impacted industries. Their companies compete with businesses from outside Europe which do not need to comply with comparable climate protection rules. Therefore, energy-intensive industries cannot pass on the costs of emissions trading to their customers. In consequence, production facilities would be relocated to countries without climate protection regimes – and nothing would be gained for climate protection. In efforts to cut greenhouse gases, it makes no difference whether emission allowances are allocated free-of-charge or by auctioning. Hans Jürgen Kerkhoff, President of the German Steel Federation (Wirtschaftsvereinigung Stahl): "We are afraid that the European Parliament has no longer a sufficiently realistic picture of our industries." Kerkhoff underlines that this is about the very existence of energy-intensive industries in Europe. He notes: "It is deplorable that the European Commission is out of touch with industry's reality in the Member States."

Besides huge costs in the planned auctioning of allowances, the energy-intensive industries expect strongly rising electricity prices. Rainer Menge, Vice-President of the German Nonferrous Metals Federation (Wirtschaftsvereinigung Metalle), describes the situation in concrete words: "In the NF-metals industry, there are companies which still need to cover their electricity requirements for the current year and the following years. It is difficult for them to keep up operations in the present conditions." Menge calls for a compensation for rising electricity prices for energy-intensive industries, where higher electricity prices are attributable to emissions trading: "Here, political support is essential – without ifs or buts."

In the period from 1990 to 2006 the energy-intensive industries reduced their CO2 emissions by 20 percent, while increasing their production by 28 percent over the same stretch of time. The energy-intensive industries combined achieve some 20 percent of manufacturing industry sales and employ 875,000 persons.

PressContact: