VCI position in a nutshell
The chemical-pharmaceutical industry supports the political goal of the energy transition (Energiewende) to make energy supplies climate-friendly, reliable and affordable. The industry actively contributes to greenhouse gas cuts. In 2019, it highlighted in a study how the German chemical industry can achieve greenhouse gas neutrality by 2050 in technological terms.
By then, the industry needs well over 600 TWh of renewable electricity at a price of 4 cent/kWh. Now a sound concept is needed on how such an amount of electricity can be reliably provided at this price by expanding renewable energies at home and with imports from abroad.
Compensation for price increases
It should be noted that promoting another expansion of renewables also brings further cost increases for the chemical industry. Irrespective of burden-easing measures for highly energy-intensive companies, the chemical industry is already now paying over 1.2 billion euros p.a. in EEG charge (EEG-Umlage) alone. Additional costs are threatening also from the accelerated coal phase-out by 2038 at the latest which brings higher electricity exchange prices. This is because of gas power plants now becoming the marginal power plant, instead of less costly coal power. Such further costs for the chemical industry could add up to a high double-digit euro amount. The German federal government intends to regulate compensation for this in a funding guideline. This guideline as well as constant security of supplies are essential for the international competitiveness of energy-intensive industries.
Moreover, effective impulses are lacking for limiting the costs for the market integration of renewable energies. In particular, grid fees and further charges are rising due to the costs of grid expansion and stabilisation and yet more factors such as the capacity reserve and the brown coal reserve, redispatch measures and temporary curtailment of renewables due to grid bottlenecks. All these costs weaken the competitiveness of energy-intensive companies – without any noticeable benefit for climate protection.
Some provisions of the "act collectively amending energy legislation" (Energiesammelgesetz) adopted in December 2018 cause legal uncertainty, especially those on the passing on to third parties of electricity relieved from the EEG charge. This increases bureaucracy in filing applications for the "special compensation rule" (besondere Ausgleichsregelung) which can have negative impacts on corporate investment.
Electricity consumption will climb
Electricity is going to become ever more important in the future – for example, for the digitalisation and electrification of industrial processes and for electro-mobility. However, technologies with lower CO2 emissions can become established only if competitive prices for the required electricity are guaranteed in the long term - while the EEG charge causes an artificial cost increase in electricity consumption. Therefore, burden-easing from the EEG charge is vital for energy-intensive companies.
THE VCI IS CALLING FOR THE FOLLOWING
- Reduce the costs of the Energiewende to a minimum
New laws should not bring further burdens which then necessitate relief measures for energy-intensive plants. The planned CO2 pricing within national emissions trading is a negative example for this.
- Compensation for electricity price increase in compliance with state aid legislation
Due to international competitive pressure, the energy-intensive industry responds sensitively to price increases. Regarding the expected cost increase in electricity purchasing due to the coal phase-out the German federal government should, therefore, negotiate with the EU Commission a compensation that is compliant with state aid legislation.
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