The traffic light coalition is discussing relief for the economy. Minister Habeck favors an industrial electricity price. The FDP strictly rejects this. What are the arguments of both sides?
Some business associations, such as the Chemical Industry Association, have been calling for an industrial electricity price for a long time. “Anyone who wants to maintain existing production in Germany and push investments in climate-friendly technologies cannot avoid competitive electricity prices for industry,” says a current position paper, in which Economics Minister Robert Habeck’s plans are welcomed in principle.
Habeck’s ministry presented a possible concept for this at the beginning of May. Energy-intensive companies would therefore only have to pay six cents per kilowatt hour of electricity, limited to 80 percent of consumption. For comparison: In the first half of the year, the wholesale price for electricity was around ten cents.
Price cap as a “finite subsidy”
The price is significantly lower than last year, but still too high, says Habeck. He therefore advocates a price cap as a “finite subsidy”. It is about keeping investments in the transformation towards a climate-neutral economy in Germany. Habeck fears that companies would otherwise prefer to invest abroad. Economic substance could be irretrievably lost – a warning that also comes from the Association of the Chemical Industry and representatives of other energy-intensive sectors.
The industrial electricity price project could cost 25 to 30 billion euros by 2030. Habeck has meanwhile brought a smaller variant into play, for example with a limit of three to five years as a compromise.
Irrespective of the magnitude: the low industrial electricity price should be financed from the Economic Stabilization Fund WSF, from which the price brakes for electricity and gas are already paid. “Yes, that’s debt-financed,” admits Habeck. But given the choice between higher debt and the loss of industry, the decision is clear to him: “We must not allow the latter.”
Approval from NRW and Lower Saxony
Habeck receives support from several Prime Ministers, especially from countries with large industrial companies, such as the CDU politician Hendrik Wüst from North Rhine-Westphalia: Industry needs reliability, the steel, chemical and cement industries could not survive without competitive electricity prices. Lower Saxony’s Prime Minister Stephan Weil (SPD) made a similar statement: It’s about stopping the exodus of companies and securing jobs.
FDP and medium-sized companies against it
The critics – above all from the FDP, but also from business associations, which mainly represent medium-sized companies – are not convinced. They fear a distortion of competition between those who benefit from such a subsidy and those who ultimately have to pay for it, as FDP General Secretary Bijan Djir-Sarai emphasizes.
But it is about more than the question of financing. Djir-Sarai has fundamental concerns. An industrial electricity price is not compatible with the ordering principles of the social market economy: “Prices have a signal effect in the market economy.” According to the FDP politician, if the signal effect is lost due to a subsidized price, this will have far-reaching consequences. The incentive to invest in energy efficiency or in new forms of electricity generation, for example through company-owned wind farms, could dwindle.
Chancellor Scholz reserved
Instead of correcting the market price, everything must be done to increase the energy supply, says Djir-Sarai. A position that Chancellor Olaf Scholz also represents. Despite massive demands for an industrial electricity price from his own party, he has so far been very cautious. The SPD chancellor said at a meeting of the CDU Economic Council that the energy industry could not become a “permanent case of subsidies”. Rather, it is about improving the production conditions for electricity generation in order to have cheap electricity prices in the future.
The scientific advisory board at the Federal Ministry of Finance is also among the critics. The members of the committee, leading German economists, point out that a significant proportion of the high prices are due to government regulations – from the electricity tax to the CO2 tax. Energy-intensive companies could already be partially exempted from this. It is about an “extremely complex and contradictory structure of taxation and funding in the energy supply”.
The Advisory Board is therefore calling for the electricity tax to be abolished for everyone – i.e. for companies as well as for private households. In addition, funds that are urgently needed to expand the infrastructure should not be put into “managing the shortage”, but into “resolving the shortage”.
An end to the debate is not yet in sight – especially since new negative news from the economy makes headlines almost every day. According to association representatives, a temporary industrial electricity price could, together with other measures, contribute to the urgently needed strengthening of the economy. Otherwise the negative trend would intensify.
At the same time, there is great concern that the requirements for a reduced electricity price could be as high as with the energy price brakes. So far, they have been called up significantly less than expected.