Germany backs exemptions to green energy rebates

Alsumer Berg, 2014. [Michael/Flickr]

Several major industrial centres are situated along the Rhine river. Alsumer Berg, 2014. [Michael/Flickr]

The federal government, and the Länder (states) on Tuesday (1 April) closed ranks in their dispute with the European Commission, over exemptions for the industrial sector provided by the controversial green energy law.

Just one day before the next round of negotiations between the Economics and Energy Minister Sigmar Gabriel and the EU executive, regional prime ministers announced their support for the German government’s position. The latter have been staunchly defending exemptions for the industrial sector from green energy subsidisation.

Read>>:  German energy prices 50% higher than EU average: McKinsey

“Everything must be done to avoid losing jobs,” warned Chancellor Angela Merkel on Tuesday evening, after a meeting with regional leaders at the federal chancellery in Berlin.

Gabriel said the agreement is a positive step towards avoiding dramatic competition problems for the industrial sector. 

“I thank the Länder very much, because we are absolutely in agreement that the consultations with Brussels must achieve some kind of continued exemption for the energy-intensive industry in Germany from apportionment required by the Renewable Energy Sources Act (EEG),” the Vice Chancellor said. Hundreds of thousands of jobs depend on this, he emphasised.

This solidarity was also stressed by Baden-Württemberg’s prime minister Winfried Kretschmann (Greens), his Thuringian colleague Christine Lieberknecht (Christian Democratic Union) and their counterpart in Schleswig-Holstein Torsten Albig (Social Democratic Party).

“This is an important signal to the people in the country – but also to the European Commission in Brussels – that here we stand unified for the Energiewende,” said Lieberknecht.

According to Gabriel, the German industrial sector has fallen into a “difficult competition situation” with its competitors in the United States.

Energy prices there are not very different, he explained, but the taxes and expenses are much lower. This must be taken into consideration during the European Commission’s evaluation.

The European Commission is currently assessing which exemptions for companies in Germany are problematic according to EU state aid law. Some German companies may also be required to repay refunds they received in previous years.

Recently, the powerful employers’ group BusinessEurope called on European Commission President José Manuel Barroso to radically shift the EU's energy policy away from climate change mitigation towards cost-competitiveness and security of supply. [more]

But a EU summit dedicated on energy with the objective of lowering prices and boosting the Union’s industrial competitiveness, held on 22 May, ended up without major decisions. [more]

EU Energy Commissioner Günther Oettinger unveiled a document late last year on state intervention in power production that warns EU energy prices will continue to rise unless governments take steps to reduce green subsidies.

As most renewable energies are still more expensive than fossil fuels, a variety of support schemes have been put in place to accelerate their uptake and meet the EU's goal of sourcing 20% of its energy from renewable sources by 2020.

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