Habeck ready to make concessions on industrial electricity prices

goa For months, the federal government has been arguing about the introduction of an industrial electricity price. Now Federal Economics Minister Robert Habeck (Greens) is ready to make concessions. “We need an industrial electricity price for the next three to five years,” he said on his trip to India. This would mean that the duration of the industrial electricity price would be much shorter than it had previously been required to be.

Habeck is pushing for a decision as soon as possible. There is not much time left: “If we talk for a long time, then the companies will make their own decisions and they will no longer be for Germany as a location,” he said.

Habeck gets support from the SPD parliamentary group. Its deputy faction leader Achim Post said that a temporary, targeted industrial electricity price is “an important bridge until competitive energy prices are permanently achieved through the ramp-up of renewable energies”.

Habeck has been promoting his plan for weeks. So far, the concept from his house provides for companies with a certain energy and competition intensity to be guaranteed an electricity price of just six cents per kilowatt hour of electricity for 80 percent of their historical electricity consumption by 2030.

Habeck’s proposal could significantly reduce costs

The state aid for an industrial electricity price would have a volume of up to 30 billion euros. A term of the regulation of only three to five years instead of until 2030 could reduce the costs.
Habeck would thus meet his cabinet colleague Christian Lindner (FDP). The Federal Minister of Finance rejects an industrial electricity price, among other things, for reasons of cost.
According to Habeck’s ideas, the money to finance the industrial electricity price should come from the Economic Stabilization Fund (WSF).

This special pot, set up during the corona pandemic, was reactivated during the energy crisis to cushion the consequences. The electricity and gas price brakes in particular will be financed with the up to 200 billion euros. Due to falling prices, however, the financing of the brakes should become significantly cheaper – which is why there is now a lot of money left in the pot. Lindner does not want to use these funds, Habeck considers it negligent.
The economics minister said in India that the acute phase of the energy crisis with its price spikes is over. However, the energy crisis as a whole has not yet been averted, and energy prices are still at a high level. At the same time, “there is still a lot of money available” in the WSF, said the minister.

Abolition of the electricity tax would not benefit the industry

The FDP not only fundamentally rejects a state-subsidized industrial electricity price. She is also opposed to opening up the Economic Stabilization Fund because she considers this to be legally impermissible.

SPD politician Post emphasized that it is correct that there are narrow legal limits to the use of the WSF. “Nevertheless, I would like us to examine possible financing options for an industrial electricity price in a solution-oriented manner, including the WSF, instead of categorically excluding them from the outset.”

A few days ago, the opponents of an industrial electricity price received support from the scientific advisory board at the Federal Ministry of Finance. In a statement by the Advisory Board, which was first reported on by the Handelsblatt, it is said that an industrial electricity price harbors the risk “that necessary structural adjustment processes will not take place”.

>> Read also: Government advisers reject industrial electricity price

It also states that in times of tight finances and in view of the necessary effort to expand renewable energies, “we advise against the introduction of an industrial electricity tariff”. The Advisory Board proposes that the government consider completely abolishing the electricity tax. Well-known economists such as ESMT President Jörg Rocholl and Ifo boss Clemens Fuest sit on the Advisory Board, and the body is independent.

However, the abolition of the electricity tax demanded by the Scientific Advisory Board would have no relief effect for the energy-intensive sectors that should benefit from Habeck’s industrial electricity price. They are exempt from electricity tax anyway. The electricity tax is 2.05 cents per kilowatt hour.

However, smaller and medium-sized companies that pay the full tax rate would benefit from a reduction or complete abolition of the electricity tax. For example, the Braunschweig-Lüneburg-Stade Chamber of Crafts uses concrete case studies to show what effects it would have if the electricity tax were reduced from 2.05 cents to the European minimum rate of 0.05 cents.

Lower Saxony insists on industrial electricity price

According to this, a medium-sized bakery with 53 employees and an annual electricity consumption of a good 200,000 kilowatt hours could be relieved by reducing the electricity tax by up to 4265 euros. A butcher’s shop with a similarly high level of electricity consumption would therefore only have to pay around 100 euros in electricity tax per year instead of almost up to 4500 euros.

According to calculations by the Chamber of Crafts, the electricity tax would also drop noticeably for smaller and less electricity-intensive craft businesses if taxed according to the European minimum rate.

>> Read also: Germany needs chemistry – and it needs the industrial electricity price

At the same time, however, the advocates of an industrial electricity price also received encouragement. Lower Saxony’s Economics Minister Olaf Lies (SPD) said he in no way shared the assessment of the Scientific Advisory Board. “The rest of the economy also benefits from a strong and sustainable industry. The energy-intensive industry faces massive challenges,” he explained.

According to Lies, there is no way around an industrial electricity price. It is not about keeping energy-intensive industries alive with state support so that production can continue as before. Rather, the decarbonization of production processes must be actively promoted and supported in order to be able to achieve the goal of CO2 neutrality.

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