Kiel Institute for the World Economy
A new report published by the Kiel Institute for the World Economy examines the use and costs of government subsidies in German industry, including controversial areas such as coal production, nuclear waste disposal or industry rebates on energy taxes. The report, written by Claus-Friedrich Laaser and Astrid Rosenschon, points out that once introduced, subsidies often burden the state budget for decades. In 2017, the federal government spent 2.6 billion euros to subsidise hard coal mining despite the fact the government had agreed a decade ago to end unprofitable hard coal production. While coal subsidies will end this year, the government will continue to pay for the environmental damage caused by coal mining, as well as to support miners, the authors say. Similarly, taxpayers are still funding nuclear power despite the nuclear phase-out. To date, the disposal of radioactive waste has cost the federal government some 150 million euros a year on average. The researchers also criticise “contradictory” subsidies, such as energy tax exemptions for energy-intensive industries. These amount to “a subsidy of production procedures that are especially damaging for the environment or use a lot of energy,” meaning that a full tax on these companies could be particularly effective. The current exemption system “renders the entire energy and environmental policy absurd,” the authors write.
Read the report in German here.
See the CLEW dossier The next German government and the energy transition for more information.
Energy-intensive companies in Germany need competitive power prices to survive in the global market, Angela Hennersdorf writes for WirtschaftsWoche Online. Energy costs were among the main cost factors for companies such as metal provider Aurubis, Hennersdorf says. She quotes Aurubis manager Ulf Gehrckens as saying that without the exemptions from power taxes and levies such as the renewables surcharge the company's power costs would more than double. The average electricity price for industry, commerce, and services in Germany has risen by 184 percent to currently 17.2 cents per kilowatt-hour since 2000, Hennersdorf writes. Levies and taxes account for more than half of the electricity price. About 95 percent of all companies in Germany pay the renewables surcharge, she writes.
Find the article in German here.
Germany is turning its back on diesel as car scrapping premiums encourage drivers to buy new models and get rid of their older, dirtier vehicles. However, instead of being scrapped, many diesel autos are being sold in eastern Europe and Africa, Sebastian Viehmann writes in Focus Online. According to the environmental organisation Transport & Environment (T&E), Bulgaria imported more than 100,000 used cars in 2017, among them some 35,000 diesel autos. More than a quarter of those came from Germany. T&E has expressed concern that while pollution levels in Germany have been falling for years, a paradoxical situation could arise in poorer European countries, where Germany and other wealthier EU states dispose of their dirty diesel cars. Nitrogen oxide (NOx) emissions in particular pose a severe risk to air quality in Eastern Europe, T&E stresses, saying that dangerous carcinogenic particulate matter from old diesel cars is already responsible for more than 13,000 deaths a year in Bulgaria.
Read the article in German here.
For background, read the CLEW factsheet "Dieselgate" - a timeline of Germany's car emissions fraud scandal and the CLEW article Court ruling opens door for diesel bans in German cities.
Clean Energy Wire
The current legislative period must be used to significantly advance the transport transition in Germany, said economy and energy minister Peter Altmaier at the Tagesspiegel’s Future Mobility Summit in Berlin. “I believe that we have to bring the alternative drives and e-mobility to a crucial result over the coming four years – fully electric vehicles, hybrids, fuel cell vehicles, efficient and environmentally friendly optimised combustion engine vehicles,” said Altmaier. This must happen without preferring any one technology, he said. “But this should not be an excuse to do nothing at all.” Together with the European allies, the government wants to ensure that the EU and Germany remain “locations for innovation that makes citizens’ lives easier over the next 50 years.” Altmaier said that in the future there would only be one single app that organises mobility. He said he hoped this would be “as popular as Facebook” and created in Germany.
For background, read the CLEW dossier The Energiewende and German carmakers and the factsheet The debate over an end to combustion engines in Germany.
Energy Transition: The Global Energiewende
Blogger and author Craig Morris is leaving the "Energy Transition: The Global Energiewende" blog to work for the Renewables Grid Initiative*. Morris has been the Energy Transition blog’s main blogger and the lead author of its annually updated e-book since its launch in 2012.
Read the announcement here.
*Like the Clean Energy Wire, the Renewables Grid Initiative is funded by the Mercator Foundation and the European Climate Foundation
SPD parliamentarian calls for speedy reform of renewable energy levy that includes CO2 pricing scheme
Bernd Westphal, energy policy spokesperson for Germany’s centre-left SPD party, is calling for a speedy reform of the costs related to the country’s Renewable Energy Act (EEG) and electricity levy system, Focus Online writes, citing a report by dpa. Westphal told the news agency that the financing of Germany’s energy transition had to be reasonable and sustainable. "The question of CO2 pricing cannot be excluded – even if some would like to because of regional elections in southern Germany." The Bavarian conservative CSU party is part of Germany’s grand coalition with the SPD and Chancellor Angela Merkel’s CDU, and it faces state parliamentary elections in Bavaria in October. A CO2 pricing scheme could be based on the European Emissions Trading System’s CO2 price and accompanied by financial relief, such as a reduction in electricity tax, Westphal said.