Germany’s unfair practice in the field of energy intensive industries

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

When Heads of State meet today (22 May) and discuss energy policy they will remain silent on one of the key problems in the EU internal electricity market, writes Claude Turmes.

Claude Turmes is a Green MEP from Luxembourg.

When Heads of State meet today and discuss energy policy they will remain silent on one of the key problems in the EU internal electricity market.

The German government provides its energy intensive industry with exemptions giving them an unfair competitive advantage over neighbouring countries' businesses.

Despite crying wolf, German industry companies are enjoying a 10 year low on electricity prices.

How is this possible?

Over the last three years prices have been falling at the power exchange in Leipzig. Currently they are at an historic low (40€/MWh) because of:

  • A very weak carbon price (below €4/tCo2) and
  • Massive penetration of wind and solar which decrease the need for expensive coal and gas power plants.

In addition, energy intensive industries in Germany profit from exemptions worth €10bn yearly of diverse tax breaks since they have almost a complete a free-ride:

  • on energy taxation law,
  • the renewable energy law,
  • on local "concession" payments and
  • on network charges.

As a result of these massive exemptions and the low price at the power exchange German energy intensive industries are unilaterally privileged vis à vis neighbouring countries. Companies in Belgium, Netherlands, Czech Republic and France are complaining about "dumping".

Earlier this year, DG Competition has opened an in depth inquiry examining German industries' exemption from paying network charges which amounted to €300bn in 2012[1]. When the Commission announced the case, Merkel replied that Germany would continue to block the ETS "backloading".

It still remains to be seen how the Commission will decide on the case, but it seems that nobody dares to attack Europe's new "Iron lady", neither on social dumping nor on electricity dumping or on refusing solidarity to the rest of Europe.

[1] http://europa.eu/rapid/press-release_IP-13-191_en.htm

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