Chemistry Summit in the Chancellery: Addressing High Electricity Costs for Companies

Chemistry summit in the Chancellery
Will companies soon be relieved of high electricity costs?

September 27, 2023, 5:57 p.m

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There is currently a heated debate about how the chemical sector can remain competitive in the face of high electricity prices. According to Prime Minister Wüst, it’s five to twelve for the industry. At the chemistry summit in the Chancellery, relief for companies is again on the table.

On the occasion of the chemistry summit in the Chancellery, relief for the industry from high electricity prices came into focus again. In view of the war in Ukraine, weak demand and “high energy and raw material prices, the industry is currently facing very big challenges and is increasingly under international competitive pressure,” said the federal government. At the top-level discussion, everyone involved agreed on the “necessary framework conditions” for more planning security for sustainable growth and competitiveness.

Federal Chancellor Olaf Scholz received representatives from the chemical industry in the Chancellery, including the heads of the companies Covestro and Evonik, as well as several Prime Ministers. Politics, industry and social partners reaffirmed their “common goal of a competitive, sustainable chemical location in Germany”. The exchange on the general conditions of the chemical industry should be continued, “with the aim of a chemical pact”.

Scholz is skeptical about subsidies

“It’s five to twelve for Germany as a chemical location. That means our prosperity is also in jeopardy,” North Rhine-Westphalia’s Prime Minister Hendrik Wüst told the Funke newspapers before the summit and called for a reduction in electricity prices. “We need an internationally competitive electricity price – for example by reducing the electricity tax to the European minimum rate, waiving the peak equalization of electricity tax after 2024 or through a bridge electricity price.”

In addition, faster planning and approval procedures are necessary. “Without decisive countermeasures, there is an acute risk of production and thus jobs being relocated to cheaper locations abroad,” Wüst continued. Action must be taken here; Germany must “remain a strong chemical location”. To this end, he also called for a “joint, non-partisan effort.”

There is currently a heated debate about how energy-intensive companies – such as those in the chemical sector – can remain competitive in the face of high electricity prices. Industry is campaigning for a reduction in electricity taxes and network fees, while the Greens and parts of the SPD are in favor of subsidized industrial electricity prices for energy-intensive companies. Chancellor Olaf Scholz is skeptical about the subsidies, and the FDP rejects them.

BUND calls for a “chemical transition”

Hesse’s deputy head of government Tarek Al-Wazir was optimistic that he would be able to convince the federal government of a reduced bridge electricity price. “There are two prime ministerial conferences in October and November, and all federal states are in favor of a bridge electricity price,” he told the t-online portal. He himself is in favor of such a reduced bridge electricity price because he knows “that our large chemical and pharmaceutical companies have locations in the USA and Japan.” “They can easily relocate their business.”

The environmental organization BUND, on the other hand, called for a “chemical transition”. “Legal incentives to switch to sustainable, safe chemicals” are needed. The industry is pushing for subsidized electricity, “but the real challenge is to make the industry sustainable and to drastically reduce energy and resource consumption,” explained the environmental protection organization.