Industrial electricity price: ZVO calls for equal rules for all

The German Surface Technology Association (ZVO) welcomes the plans of the Federal Ministry of Economics and Climate Protection (BMWK) to introduce an industrial electricity price in principle, but also calls for the inclusion of small and medium-sized enterprises (SMEs).

The German Surface Technology Association (ZVO) is closely following the current debate on the possible introduction of an industrial electricity price. In view of the high electricity prices in European and international comparison, the association welcomes the plans of the Federal Ministry of Economics and Climate Protection (BMWK) in principle. However, it also calls for the inclusion of small and medium-sized enterprises (SMEs) in the considerations on the design of a subsidized electricity price. According to the BMWK's plans, they would be mostly excluded from electricity price subsidies.

Decisive action is needed to maintain the competitiveness of energy-intensive companies in Germany and to support them in their transformation to modern, climate-neutral production processes. The primarily medium-sized companies that are members of the ZVO are also in the midst of a complex and cost-intensive transformation process. Surface technology, which is essential for numerous industrial sectors, is under enormous pressure due to its high energy intensity, especially in international competition.

SMEs will only be able to make the extensive investments required for the transformation if there are corresponding guarantees that the applicable electricity price will be at a level that guarantees production under competitive conditions in the medium and long term. However, the key points paper on the introduction of an industrial electricity price published by the BMWK on May 5, 2023, limits in an incomprehensible manner the group of companies that could receive the presented "bridge electricity price" in the future. Due to the specification of "energy-intensive industrial companies that are in international competition" and the reference to the previous Special Equalization Scheme (BesAR), largely only the large companies in the basic materials industry will benefit.

However, the central objective of the bridge electricity price must be to maintain the value chains in Germany and to consolidate them in the long term in the course of decarbonization. This is the only way Germany as an industrial location can remain a leader in international comparison in the future. Small and medium-sized enterprises will play a central role in this. It will therefore be crucial that a possible industrial electricity price (or bridge electricity price) is designed in such a way that ALL companies at risk due to their energy intensity - regardless of their size - can benefit from it. The European Commission's "Guidelines on State Aid for Climate, Environment and Energy 2022" (KUEBLL) already provide suitable criteria for classification. All companies that meet the criteria set out therein should be able to receive the state-fixed industrial electricity price. Appropriate hardship criteria can also be used to ensure that companies whose sector is not explicitly mentioned in Annex 1 of the KUEBLL guidelines are also included.

Finally, the ZVO emphasizes that far-reaching interventions in the market must be avoided and that, in principle, pricing processes should continue to be relied upon. To a large extent, it is not the actual electricity prices, but the additional taxes and levies that have to be paid, which mean that the prices paid by industry are too high by international standards. By adjusting these government-initiated electricity price components, the industry could be relieved quickly and unbureaucratically, without interfering too much in the actual pricing and avoiding permanent subsidies as far as possible.

As a representative of a cross-section of small and medium-sized enterprises, the ZVO will actively participate in the further discussion on the industrial electricity price and in the development of a competition-neutral model that works along the entire value chain. To this end, the German government should intensify the dialog with the energy-intensive industries concerned and involve all relevant players, from large companies to SMEs. (OM-08/23)