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14 Oct 2021, 13:46
Kerstine Appunn

EU toolbox against energy price hike not enough, says German energy intensive industry

Clean Energy Wire

The German chemical industry says the European Commission’s proposals to fight the energy price crisis in Europe may be sufficient to fight energy poverty but are not likely to help energy-intensive companies through the crunch. “German industry is currently experiencing an unprecedented price shock for gas and electricity,” Wolfgang Große Entrup, managing director of chemical industry association VCI, said. Lowering energy taxes was a good idea but it would become a zero-sum game if other measures, such as new state aid guidelines for environment, climate and energy and the new energy tax directive, lead to higher electricity prices. The expansion of renewable energies and innovation in energy production would have a price-dampening effect, the VDI conceded, but only in the long term.

Energy and utility organisation BDEW welcomed that the European Commission had refrained from hasty interventions in the European electricity and gas market, because that would “inevitably make energy supply more expensive and run the risk of seriously worsening the climate for urgently needed investments.” “We share the Commission's analysis that the price increases are largely caused by the worldwide economic recovery and the resulting strong global demand for energy - neither the European Green Deal nor a market failure are the cause of the current situation,” BDEW head Kerstin Andreae said in a press release. The BDEW is critical of plans to achieve price stabilisation via a strategic gas storage reserve, however. To ensure security of supply, the current Gas Security of Supply Regulation is sufficient as it intervenes as little as possible in the open, liquid, well-connected and transparent EU gas market, they argue.

Energy-intensive companies in recent days have increasingly voiced concerns that the price hike could seriously hamper their business, calling on the government to provide assistance. Morever, the association of German towns has called for financial support for poorer households to weather the energy price crisis. However, German government advisers have warned that too much state intervention in the energy market could ultimately backfire on plans to increase carbon pricing and emissions trading as the EU's key instrument for emissions reduction. 

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