WDK rejects German energy policy as "acute threat" to SMEs

Frankfurt, Germany – The German rubber industry association WDK has warned that a national emissions trading scheme will have “irreversible consequences” for more than 10,000 medium-sized industrial companies in the country.

In an 18 June statement, The Fair Energy Transition Alliance, which also includes WDK, said the carbon pricing scheme starting next year could lead to emigration of business, job losses and reduced value-creation among energy-intensive industries. 

In its appeal, the alliance warned that the initiative would not help recovery plans from Covid-19 pandemic and will in fact ‘worsen its effects.’

“Germany cannot leave its medium-sized industry out in the cold when it comes to energy prices,” said Dr. Uwe Mazura, general manager of the Association of the German Textile and Fashion Industry. 

He warned that the new emissions trading system along with the high electricity prices will drive thousands of companies into bankruptcy and production abroad. 

“That would not help the climate, it would harm it!” he added.

The alliance recommended that ‘disadvantageous’ energy and climate policy in Germany should be put to the test and remedied.

“For example, national emissions trading may only enter into force once the necessary relief regulations for the companies concerned have been adopted and are effective,” it added. 

This, for instance, means that electricity should not be expensive if companies are being forced to switch from coal, oil and gas to electricity.

The alliance is also seeking relief for electricity-intensive companies that switch to renewable energies. 

Presented in 2019, the national scheme requires companies active in the heating and transport sectors and trading fuels to pay for their CO2 emissions. 

The scheme is proposed to start with a fixed carbon price of €10/tonne that rises to €35/tonne by 2025. Thereafter, prices will be allowed to float up to a ceiling of €60/tonne, according to commodity market new website Montel.

The move is part of Germany’s ambitious plan to become greenhouse gas neutral by 2050. The country has set the preliminary target of cutting emissions by at least 55% by 2030 compared to 1990 levels.