The EU environment ministers meet on 28 February to discuss the future of emission trading (ETS). Speaking on behalf of the energy-intensive industries, Utz Tillmann calls for reform plans to give more consideration to industrial competitiveness. The VCI’s director-general warns against new extra burdens.
Press Release by the Energy-Intensive Industries in Germany (EID)
Tomorrow the Council of Environment Ministers of the EU Member States will deal with the Emission Trading Directive (ETS) post-2021. Utz Tillmann, spokesperson of Energy-intensive industries in Germany (EID) and director-general of the German chemical industry association (VCI), states: “The Council decisions have to give more consideration to the industrial competitiveness of energy-intensive basic materials industries. This should lead to a solution that both achieves the necessary climate protection and preserves investments and jobs in Europe.”
According to Tillmann, international competition is fierce for energy-intensive industries. Moreover, in efforts to cut greenhouse gas emissions the companies are reaching the technical limits of their production processes. With a disproportionate reduction of allocation, as is planned by the Commission, the companies would need to purchase massive amounts of allowances. The ensuing costs would mean a heavy extra strain on their international competitiveness.
Against this backdrop, energy-intensive industries are counting on the German federal government. Franziska Erdle, spokesperson of EID and director-general of the German metal industry association Wirtschaftsvereinigung Metalle, says: “The German federal government has outlined the way ahead in the climate protection plan 2050 – for EU emission trading that maintains the competitiveness of energy-intensive industries and for electricity price compensation without the cap and degression that the European Commission is proposing. We hope that the federal government’s position will prevail in the European Union too.” As a matter of principle, it should be prevented that the best performing installations are penalized with higher costs through emission trading. Erdle holds that several steps are required for this purpose: The benchmarks must be realistically achievable in technical and economic terms, there should be no correction factor in the free allocation to sectors at risk of carbon leakage, and electricity price compensation needs to be kept up. Erdle also advocates raising the so-called industry cap by some 5 percentage points; this demand is made by the German federal government.
Tillmann and Erdle jointly emphasize that the Council decisions should not fall short of the above points. Otherwise, energy-intensive industries will be saddled with major additional burdens. Tillmann: “Now it is up to the Council to decide on the future shape of ETS. The Council decisions will also set the course for the investment choices of our industries to 2030.” He urges the federal government to only accept an agreement that brings about competitive framework conditions for industry.
Energy-Intensive Industries in Germany (EID) have around 830,000 staff, accounting for 14 percent of employment in the manufacturing sector. Every job in the energy-intensive production of basic materials secures about two jobs in other industries or in the service sector.