Germany’s VCI calls on future government to drop renewable energy surcharge

Frankfurt, Germany – The German Chemical Industry Association (VCI) has called on the future German government to tackle a number of issues faced by the sector, including high electricity prices and time-consuming bureaucracy.

In a statement 1 Oct, the VCi called for a speedy formation of a coalition government and pointed out seven policy areas to be “addressed immediately” to ensure the country remains “an internationally competitive and innovative location for the chemical and pharmaceutical industries.” 

"There is an urgent need for action on many location factors. High electricity prices, time-consuming bureaucracy and slow approval procedures are just a few examples that cause major problems for companies," explained VCI President Christian Kullmann.

A key area VCI said was the high electricity prices, compounded by Germany’s renewable energy surcharge – otherwise known as the EEG levy.

“The current system of surcharges and levies in Germany as well as the current EU state aid framework are unsuitable to accompany the transformation [to clean energy],” said the VCI. 

According to the association, electricity currently costs companies three times more than the previous year, hitting small and medium-sized businesses particularly hard. 

“The coming federal government must reduce all state-induced levies on electricity prices as far as possible,” it said, urging the future government to introduce a legislative initiative to abolish the EEG levy. 

The VCI also called on the government to expand research funding and ‘substantially increase’ research tax allowance to advance low-CO2 circular economy and environment friendly technologies.

“For this, technologies such as chemical recycling, hydrogen production and biotechnology must be recognised and promoted. In addition, sufficient resources must be available,” said VCI.

Other measures suggested by VCI included reducing bureaucracy, particularly for small and medium-sized businesses; modernising planning procedures for approvals of projects; reforming corporate tax; supporting Green Deal goals and creating a €300-500 billion growth fund to support the industry’s transformation through to 2030.