German chemicals industry sees EU climate package as ‘enormous challenge’

Frankfurt, Germany – The German Chemicals Industry Association (VCI) has described the latest EU climate protection package as “an enormous challenge for companies in Europe.”

“We are facing what is probably the biggest transformation of the economy since the beginning of industrialisation,” said managing director Wolfgang Große Entrup 14 July. 

Brussels unveiled a package of proposals on 14 July seeking a 55% reduction of CO2 emissions by 2030 compared with 1990 levels ahead of transition to ‘net-zero emissions' by 2050. 

The package covers a broad range of policies related to energy, land use, transportation and taxation, and stipulates the effective ban of combustion engine vehicles by 2035.

In response to the proposal, VCI said it was “not enough just to be a role model for the world,” calling on the EU to ensure “prosperity and competitiveness" for the region.

“This means that companies need effective protection against unfair competition in view of the massive additional costs for climate protection,” the VCI boss said. 

“Otherwise, instead of a climate-neutral European industry, a climate-neutral Europe without industry threatens," he warned.

A VCI concern, said Große Entrup, is that the proposal aims to greatly reduce the “tried-and-tested” relief rules in emissions trading and replacing it with CO? limit levies. 

“These will not effectively protect the export-oriented chemical-pharmaceutical industry in international competition,” said the VCI managing director. 

Furthermore, the levies are difficult to reconcile with the rules of the World Trade Organization and could thus provoke additional trade disputes, he added.

"The signals from our international trading partners are clear: an EU laboratory experiment with border taxes is dangerous and already doomed to failure," Große Entrup warned in conclusion.