10 November 2023 – German industry is struggling with significantly higher electricity prices compared to China and even more so compared to France. For this reason, German industry is now to receive a significant reduction in electricity prices. However, the measure could lead to a new dispute, particularly at the World Trade Organisation (WTO).
German industry to receive electricity price relief
The German government has reached an agreement in the months-long dispute over the significant increase in electricity costs compared to other EU countries. Although the package of measures still has to be passed by the German Bundestag, existing relief amounts are to be increased by over 90%. The measure, which is planned for up to five years, should urgently provide further relief for domestic industry and hopefully also for SMEs.
Companies to be relieved of indirect CO2 costs
Even if a reduction in electricity prices in Germany is extremely welcome, especially as small and medium-sized companies in the manufacturing industry do not seem to have been forgotten for once, some parts of the government draft are likely to be grist to the mill of the international community.
In the accompanying press release, the German government writes, among other things “With electricity price compensation and the “super cap”, companies will be relieved of the sums incurred in connection with emissions trading-related indirect CO2 costs.”
Industriepolitik in der Zeitenwende: Off to recycling?
We will leave out the fact that the German Federal Ministry of Economics and Climate Protection’s strategy paper “Industriepolitik in der Zeitenwende” in the sections on CO2, carbon leakage, EU emissions trading and CBAM belongs in paper recycling.
New dispute at the WTO inevitable?
But while Europe and Germany want to give their companies the indirect CO2 costs as a gift, they want to collect CO2 taxes at the EU’s external border. This is likely to fuel the increasingly heated debate at the World Trade Organisation (WTO) about the European Union’s green double standards.
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