German industry groups warn of “climate policy disaster”

Frankfurt, Germany – Federal government moves to introduce a carbon emission trading scheme in Germany could severely damage the country’s industrial base, an alliance of industry associations has warned.

The ‘fair energy’ alliance, which includes German rubber industry association the WDK, is particularly concerned about the impact of the scheme on the competitiveness of smaller companies.

At present, small and medium-sized industrial companies participate in the EU emissions trading scheme but get most of their certificates free of charge.

The German government intends to introduce a national emissions trading scheme with the aim of cutting CO2 emissions by making fossil fuels more expensive.

The scheme would place a proportionally heavier burden on SMEs than larger companies, argues the alliance, which believes that the impact on industry has not been properly considered.

In particular, its statement pointed out, alternative energy sources are not available in Germany in the required quantity and at competitive prices.

“The consequence would be that medium-sized companies, which urgently need industrial heat processes, can no longer invest in Germany,” said the industry grouping.

The associations are, therefore, seeking an exemption from the national emissions trading system and relief for industrial companies from increasing levies on purchases of electricity. 

Plans for renewable energy subsidies within the federal government climate package “can at best be a first step towards restoring the competitiveness of German electricity prices,” the alliance added.

Ingeborg Neumann, president of the Association of the German Textile and Fashion Industry called for a more considered approach to the legislation.

"If we are not careful with our climate policy… we will in future source our products from foreign producers with far worse environmental standards and CO2 values,“ warned Neumann. 

“The world climate is not helped [and] our German industrial knowhow would be irretrievably destroyed,” he added. “That would not only be industrial policy madness, but also a climate policy disaster."

Also including steel & metal, plastics, ceramics, textile & fashion associations, the ‘fair energy’ alliance represents around 10,000 German companies with about a million employees and annual sales of €200 billion.