VCI position in a nutshell

Energy Transition

16. July 2021 | Position

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The chemical-pharmaceutical industry supports the 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, the VCI highlighted in a study how the German chemical industry can achieve greenhouse gas neutrality by 2050 in technological terms. For this, the industry needs over 500 TWh of renewable electricity at a price of 4 cent/kWh. On the platform Chemistry4Climate, the industry is working with other major stakeholders to develop a sound concept for how to provide such volumes of electricity at the said price.

Compensation for cost increases

Many energy policy rules increase the costs for industry. This hampers progress on the way towards more climate protection, as low-emission processes only become possible with favourable electricity prices. Last but not least, high electricity prices are a considerable disadvantage in international competition for energy-intensive industries such as chemistry. Promoting the expansion of renewables also brings further costs for the chemical industry. Irrespective of burden-easing measures for highly energy-intensive companies, the chemical industry is currently paying over 1.2 billion euros p.a. in EEG charge (EEG-Umlage) alone. Further burdens come with the German fuel emissions trading act (BEHG). Its burden-easing rules cause such high bureaucracy costs that the strain can be made up for only to a minor part. Moreover, extra costs arise due to the accelerated coal phase-out which renders electricity production more expensive. Here, there should be compensation as is necessary for maintaining international competitiveness. Furthermore, effective impulses for limiting the costs for the market integration of renewable energies are lacking. In particular, grid fees and further charges are rising due to the necessary grid expansion and the power plant reserve. Measures are essential to ensure reliable supplies but they must be shaped as cost-efficiently as possible.

Own electricity supply has a major role

Cogeneration ensures the supply of heat and electricity in operations in a climate-friendly way. However, the most recent amendment to the German renewable energies act (EEG) adversely affects the economic viability of such plants.

Electricity consumption will climb

Electricity is going to become ever more important in the future – for example, for the electrification of industrial processes. 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, in particular, causes an artificial cost increase in electricity consumption. Therefore, full funding of the expansion of renewable energies from the federal budget and introducing an industry electricity price are necessary. This is the only way to maintain competitiveness and to enable the transformation to greenhouse gas neutrality.

THE VCI IS CALLING FOR THE FOLLOWING

  • Reduce the costs to a minimum
    New laws should not bring further burdens which then necessitate relief measures for energy-intensive plants. The fuel emissions trading act (BEHG) is a negative example: the compensation rules adopted by the federal cabinet are not sufficient and set overly high hurdles.
  • Compensation for electricity price increase in compliance with state aid legislation
    Regarding the electricity price increase that is expected from the coal phase-out, the German federal govern-ment should negotiate with the EU Commission a compensation regime that complies with state aid legislation. Furthermore, the chemical-pharmaceutical industry speaks for introducing an industry electricity price.
  • Make the expansion of renewables more cost-efficient
    The further expansion of renewable energies production is important for climate protection. In order to ease the burden on industry, this expansion should be funded from the federal budget.

Contact

For questions or suggestions, please feel free to contact us.

 Jenna Juliane Schulte

Contact person

M.A. Jenna Juliane Schulte

Energiepolitik