German industry against energy reform

• 10 years ago (2014-02-02)
• Junior Isles

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The Federation of German Industry (BDI) has warned that the German government's recent energy plans will jeopardise jobs in the country, with the proposal to force firms generating their own electricity to pay extra to support renewables being most problematic .

The BDI was responding to proposals by German Economy Minister and Vice-Chancellor, Sigmar Gabriel, to reform the feed-in-tariff (FiT) subsidies which have supported Germany’s green energy boom over the last decade.

The reform aims to phase out generous subsidies for renewables, appeasing both conventional power utilities and heavy industry with cuts of up to a third by 2015. At the same time, it will introduce some new support measures to maintain the long term growth in the sector necessary to replace Germany’s retiring nuclear power plants.

One of these new support proposals for renewables is that those who produce power for their own industrial use should lose their exemption from green surcharges added to power bills, providing additional funding for expanding green energy.

The Federation of German Industry (BDI) has said in a letter to its members that Gabriel's plans put 900 000 jobs in Germany at risk BDI chief Ulrich Grillo claimed that existing support given to energy-intensive firms was a condition for many companies continuing to operate in Germany.

"In this way (with an additional burden for companies), there will be a risk of companies moving away and that can lead to big job losses," Grillo claims.

ArcelorMittal, the world's largest steelmaker, has made similar warnings about the new energy reforms, claiming they would prompt companies to scale back investments.

Some conservative allies of Chancellor Angela Merkel in parliament have also criticised Gabriel's plans, with senior conservative Peter Ramsauer stating: "We will certainly not pass Gabriel's blueprint on a reform of the renewable energy law in its current form." Mr Ramsauer also raised concerns that big employers like rail operator Deutsche Bahn would be hit particularly badly by the loss of surcharge exemption.

EU Energy Commissioner Guenther Oettinger has also urged the German finance minister to reduce energy tax levels and help German companies stay competitive. He claimed that taxes and charges added to consumer bills make up about half of companies' energy costs.