Climate Protection Legislation

Arguments and Positions

Climate protection is a central concern for the chemical-pharmaceutical industry. The industry supports the European Union in achieving the global 2°C target for the year 2050 and actively contributes to this with its products and by participating in the European emission trading scheme (EU ETS).

No national go-it-alone action

Plans for a German climate legislation are becoming concrete. From German industry's viewpoint, it is essential to bring the climate policy in a reliable form and to avoid duplicate regulation. Furthermore, the national climate policy should allow as much flexibility as possible in how to reach the long-term climate goals.

For the chemical industry, EU ETS is the central instrument for achieving the climate targets while maintaining its competitiveness. The scheme provides for a legally binding emission reduction path. As a result, the sectors covered by EU ETS reduce their emissions EU-wide by 43% by 2030. Additional national measures must take into account these existing rules at European level. Otherwise, national measures are counterproductive, ineffective and inefficient. Moreover, they cause duplicate regulation.

Bring legislation in an industry-friendly shape

The sectors of transport, agriculture, building and disposal are not part of European emission trading. Instead, they fall under the European effort sharing regulation which is to be imple-mented nationally. If at all, German climate legislation should focus exclusively on sectors not covered by EU ETS. No legally binding climate targets should be prescribed neither for these nor for other sectors, in order to prevent a flood of lawsuits.

With equal importance and an equally binding character, a climate legislation should include climate goals on the one hand and goals such as reliable energy supplies, strong industrial value creation and job security on the other. CO2 pricing should be oriented to these principles, too, and it should be limited to those sectors that do not have CO2 prices as yet - especially buidlings and transport. It must not affect the ETS sectors. The idea of extending EU-ETS to transport and buildings should not be further pursued, either.

Monitor the coal phase-out

An early end of electricity generation from coal is part of the national measures to achieve Germany's climate goals. For the chemical industry, the recommendations of the Coal Commission bring huge challenges due to the emerging gap in supply security and rising electricity prices, inter alia, through a shift of the price-setting power plant type from coal to gas. Therefore, measures for reliable supplies should be laid down early. Furthermore, a compen¬sation mechanism is needed that eases the burden of rising electricity prices for all electricity consumers.

THE VCI IS CALLING FOR THE FOLLOWING

  • No renationalisation of the European climate policy
    German industry and the energy sector are already regulated under European emission trading and reach their climate goals through this volume-based system. For all sectors regulated under EU-ETS, an addditional national climate legislation (e.g. CO2 pricing) would be counterproductive, inefficient and ineffective.
  • No introduction of annual, legally enforceable sectoral goals
    Making climate protection legally binding would cause a flood of lawsuits and take away the sovereignty to make climate protection decisions from the policymakers. Moreover, due to factors such as economic development, situation of the economy and long investment cycles, annual and binding sectoral targets cannot be reconciled with entrepreneurial practice..
  • Ensure reliable supplies and affordable electricity prices - even with the coal phase-out
    A compensation mechanism needs to be developed for the electricity price increases to be expected from the coal phase-out, and that mechanism should ease the burdens on all consumers. Reliability of supplies ("Versorgungssicherheit") should be defined and reviewed already before the first shutdowns of coal-fired power plants. If the review criteria, which remain to be defined as well, are not met at the planned intervals ("Haltepunkte") 2023, 2026 and 2029, this should at least reduce the speed of the coal phase-out.

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

Contacts

Jenna Juliane Schulte

E-Mail: j.schulte@vci.de