December 2023 | A higher CO2 levy, no subsidies for electricity grid charges: what is now to be discussed as a new draft budget means higher costs for electricity and gas across the board for industrial companies in an already extremely tense situation.
The doubling of transmission grid fees from 1 January 2024 will lead to a further increase in electricity prices, which are already barely competitive, warn the interest group of Germany’s energy-intensive industries (EID).
“The announced abolition of the state subsidy for transmission grid fees means an additional annual burden of around 2 billion euros for our industries,” says Jörg Rothermel, Managing Director of EID, which comprises the construction materials, chemicals, glass, non-ferrous metals, paper and steel sectors. “Contrary to all political promises, electricity costs continue to rise.”
Rothermel says: “The measures originally planned in the electricity price package would have primarily secured the status quo for our industries anyway and not brought any significant relief. Now we are experiencing a topsy-turvy world: contrary to all political promises, electricity costs are continuing to rise.”
This is another massive blow to the international competitiveness of companies.
In order to survive in the global competition between locations and to be able to manage the transformation to climate-neutral production, a political solution for internationally competitive electricity prices is still needed. This also includes the stabilisation of grid fees. “The German government must continue to tackle this urgent task at full speed!” so Rothermel.
The energy-intensive industries in Germany (EID) employ around 880,000 people – or 15 per cent of the manufacturing sector’s workforce. Every job in energy-intensive basic material production secures around two jobs in other branches of industry and in the service sector. It consists of the interest groups Federal Association of Building Materials, The Paper Industry, Federal Association of the Glass Industry, Trade Association for Metals, German Chemical Industry Association, German Steel Federation.
“Government is leaving us completely out in the cold”
There is nothing left of the energy price relief for small and medium-sized enterprises, explains the “Bündnis faire Energiewende” (“Alliance for a fair energy transition”, BfE).
Christoph René Holler, spokesperson for the BfE:
“At the end of another difficult year, we are further away than ever from a fair energy transition. Now the Chancellor, the Vice-Chancellor and the Finance Minister have also buried all hopes that medium-sized industry will be able to produce competitively in Germany. If the members of the Bundestag from the governing parties accept this without objection, they are heralding the end for industrial companies in their constituencies many times over. We call on them to explain to local companies and workforces why they are carrying out the repair of an unconstitutional budget on the backs of companies and employees.”
The associations in the “Bündnis faire Energiewende” represent more than 10,000 German companies across all sectors with around one million employees and an annual turnover of around 200 billion euros. It consists of the interest groups of Federal Association of the German Foundry Industry (BDG), Steel and Metal Processing Industry Association (WSM), German Refractory Industry (DFFI), Hot-Dip Galvanizing Industry Association, Federal Association of Ceramic Industry, Federal Association of Energy Consumers (VEA), General Association of the German Textile and Fashion Industry, General Association of the Plastics Processing Industry, Trade Association of the German Rubber Industry (wdk).