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German Industry Warns Over Green Energy Cost Exemptions

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Jeevan Vasagar, Financial Times

German manufacturers are at risk of losing energy exemptions worth billions of euros, prompting warnings that factories will be unable to compete with US rivals that are benefiting from the shale boom.

One of the most contentious proposals being discussed as part of Germany’s coalition negotiations is the removal of exemptions that have shielded companies from the cost of moving to renewable power, which were worth €2.3bn to energy-intensive companies last year.

So far, German households and some companies have shouldered the cost of moving to green energy through surcharges on their energy bills, which have contributed to the country having the second-highest bills in the EU.

The coalition negotiators want to reduce the subsidies for green energy but also spread the cost more evenly by making energy-intensive companies pay the renewables surcharge.

Kurt Bock, chief executive of German chemicals conglomerate BASF, warned that German jobs could be lost if the company were to lose its exemption.

“If politicians burden us with such a fee, then there is a danger that production will be transferred somewhere else,” Dr Bock told Der Spiegel. “We need to decide, do we want to secure jobs or do we want a so-called fair burden-sharing?”

Mr Bock’s comments follow a stream of warnings from European executives that low US energy prices are increasingly forcing them to shift manufacturing investments across the Atlantic, where the abundance of shale gas has led to lower energy prices.

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