German industry issues stark warning ahead of EU climate summit

Germany's energy-intensive industry says it is committed to energy efficiency targets as long as international competitors are also affected. [Wolfgang Staudt/Flickr]

Germany's energy-intensive industry says it is committed to energy efficiency targets as long as international competitors are also affected. [Wolfgang Staudt/Flickr]

As EU heads of state prepare to thrash out an agreement on the bloc’s 2030 energy and climate change goals at a summit opening in Brussels tomorrow (23 October), energy-intensive industries in Germany have reiterated warnings that a European “solo effort” would come with billions in losses. EURACTIV Germany reports.

German companies are concerned about the extra burden they fear will come with a new, higher climate protection target for 2030.

Utz Tillmann, a spokesman for the Energy Intensive Industries of Germany (EID) – which includes chemicals, steelmaking, cement and others – said he supported an ambitious agreement at the Paris UN climate summit in December next year.

But these goals should include strong and comparable commitments for both industrialised and newly industrialised countries, he stressed.

Opposition to unilateral 40% GHG target

Energy-intensive industries are committed to climate protection, said Tillmann, who is chief managing director at the German Chemical Industry Association (VCI).

“But we can only produce more competitively if there are comparable burdens overseas,” he stressed.

“If Europe chooses a solo effort through a one-sided climate protection target of 40% less emissions, it would mean billions in losses for us that our global competitors would not otherwise have gained. The damage done to competitiveness among energy-intensive companies in the EU would be considerable.”

According to Tillman, existing compensation measures in the EU’s Emissions Trading Scheme (ETS) for carbon dioxide are insufficient to cover future additional burdens, and risk weakening Europe’s position against foreign competitors.

>> Read: Heavy industries renew calls for ‘carbon leakage’ protection

EU heads of state intend to come to a conclusion on a proposed 2030 framework for energy and climate change at an EU summit on Thursday and Friday (23-24 October).

Their discussion will be based on a January proposal by the European Commission, which set out an EU-wide greenhouse gas reduction goal of 40% below 1990 levels by 2030, deepening the current 2020 target of a 20% cut. The 2030 package also contained proposals to expand renewables to 27% of the EU’s energy mix and reducing energy consumption by 30%.

Carbon leakage

But most of the additional effort on reducing carbon emissions will come from the large industrial sectors already covered by the ETS, warned another EID spokesman, Klaus Windhagen, who is managing director at the Association of German Paper Factories. And the gradual decrease in emission allocations will only make matters worse in the coming years, he warned.

“We, as the various sectors, can only reach a target like that by limiting production. This production will then take place in other regions of the world with higher CO2 emissions,” Windhagen said, pointing to a phenomenon known as carbon leakage.

“As a result, the burden will not only cause a loss in industry jobs, it will also be harmful to the climate,” Windhagen said, calling for emission allocations to be based on realistic benchmarks and not be undermined by additional reductions.

For 2030, the EU climate and energy framework has proposed:

  • A 40% greenhouse gas reduction target that is binding at nation state level and may not be met by carbon offsets
  • The use of carbon offsets to meet further emissions reduction commitments made in international climate talks
  • A 27% renewable energy target that is binding at an aggregate European level but voluntary for individual member states
  • No consideration of any new energy efficiency target until after a June 2014 review of the Energy Efficiency Directive  
  • Non-binding shale gas recommendations which could be made binding after a review in 2015
  • A market reserve facility for the Emissions Trading System, with the power to withhold or release up to 100 million allowances
  • An end to the Fuel Quality Directive, which mandates reductions in the greenhouse gas intensity of transport fuels, by 2020
  • 23-24 Oct. 2014: EU summit to discuss 2030 climate and energy framework
  • Dec. 2015: UN summit in Paris expected to finalise global agreement on climate protection to replace Kyoto Protocol

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