Breaking the link between energy consumption and production / Prevent higher burdens from energy taxation

German chemical industry: A role model in energy efficiency and climate protection

Chemical production is more energy-efficient and climate-friendly in Germany than in any other region globally. From 1990 to 2008, the German chemical industry reduced its absolute energy consumption by -18 percent whilst production increased by +58 percent and climate-relevant emissions dropped by an impressive -37 percent during the same period of time. Professor Dr Ulrich Lehner, President of the German chemical industry association VCI, stated at a press conference in Frankfurt: "This makes us a role model for many other countries with energy-intensive industries, who also want to break the link between energy consumption and production."

High energy inputs are needed in chemical production and especially in the manu­facture of basic chemicals. Therefore, affordable prices for electricity and gas are an essential location factor for Germany's fourth-largest industry. When enacting the eco-tax back in 1999, the legislator took this fact into account: with a reduced tax rate for electricity and gas and with a tax cap ("Spitzenausgleich"), the legislator introduced two mechanisms for the necessary limitation of cost burdens on the manufacturing industry. Lehner: "Irrespective of this fact, existing taxes and prices for electricity in Germany are clearly above European and international levels. As matters stand today, it is more justified than ever before to keep up the described extra measures, in order not to endanger the competitiveness of industry."

The German federal government connected relief in energy taxation with one concrete condition for industry: reducing specific greenhouse gas emissions by 35 percent by 2012, as compared with 1990. The federal government annually monitors the successful implementation of this agreement. Most recently, this was confirmed in a report at the end of 2009. Lehner: "Against this backdrop, we are expecting politicians to do their bit to the agreement, too. As long as this climate agreement is in force, there must be no energy tax increase resulting from the federal government's savings package. Furthermore, follow-up provisions for after 2013 need to be developed soon for energy-intensive industries. In return, we are ready to engage in a discussion on a new cooperation agreement." If no follow-up provisions to existing relief rules are enacted, the chemical industry alone will have to pay additional energy taxes of over 1 billion euros per annum, so the VCI. This would lead to a loss in competitiveness, more pressure from imports and, finally, less economic growth.

The German chemical industry association Verband der Chemischen Industrie e.V. (VCI) represents the politico-economic interests of some 1,650 German chemical companies and German subsidiaries of foreign businesses. For this purpose, the VCI is in contact with politicians, public authorities, other industries, science and media. The VCI stands for over 90 percent of the chemical industry in Germany. In 2009, the German chemical industry realized sales of about 145 billion euros and employed more than 416,000 staff.