Economics Minister Habeck has given details of his plans for subsidized industrial electricity prices. Chemical or steel companies should pay a maximum of six cents per kilowatt hour. The result is a new traffic light dispute.
The idea has been circulating for a long time, now it is becoming concrete: The Federal Ministry of Economics has presented its plans for an electricity price cap for energy-intensive branches of industry. Accordingly, the – in international comparison – high prices should be limited to six cents per kilowatt hour. In basic industries such as chemicals or steel, this is intended to keep companies and jobs in Germany.
According to the concept of Federal Economics Minister Robert Habeck, the reduced price should only apply to 80 percent of consumption in order to create efficiency incentives. The conditions for this include adherence to tariffs and a location guarantee, according to the paper from the ministry. The concept should therefore be phased out by 2030 at the latest. According to today’s electricity prices, the costs for the state would be between 25 and 30 billion euros and should be paid from the economic stabilization fund.
rejection of finance minister
Exactly at this point, however, there is prompt objection from the Federal Ministry of Finance led by Christian Lindner. “There are no funds available for this project,” said a spokeswoman for the ministry immediately after the plans were published. In Finance Minister Lindner’s view, a “re-allocation of funds” in the Economic Stabilization Fund is also not constitutionally possible. Lindner had previously signaled rejection of a state-subsidized electricity price. He also thinks it is unfair that such a price should only apply to selected companies.
Habeck, on the other hand, argues that without subsidized electricity prices, forward-looking sectors could leave Germany. “German industry has started and is already in the process of converting its processes, which are needed for climate-neutral production worldwide,” says Habeck. “We have to support you on this path, because this path will also ensure us a strong, competitive location with sustainable jobs in the future.”
“bridge electricity price” until 2030
In the long term, a “transformation electricity price” is planned according to Habeck’s concept. Industry should benefit from cheap electricity from renewable energies. According to the ministry, measures to do this would take time. That’s why there should be a “bridging electricity price” in an interim phase until 2030, which has to be financed from public funds.
The union has approved Habeck’s plans. Michael Vassiliadis, Chairman of the IG Mining, Chemicals and Energy (IG BCE), spoke of a clear signal to strengthen the location. Germany cannot afford an “exodus” of the energy-intensive industries. According to Vassiliadis, energy is now the largest expenditure item for large parts of industry and is therefore the decisive location factor.
Mechanic works at the automotive supplier ZF in Friedrichshafen
Union smells a dispute in the coalition
In principle, the Union considers a low electricity price for industry to be right and now wants to examine Habeck’s draft. Union parliamentary group leader Jens Spahn, however, expressed doubts about the financing model: “But we have one question: what does the finance minister actually say about it? It is remarkable that this concept was not coordinated within the federal government given the importance of the topic.”