Germany's hike in electricity levy ‘counterproductive’ for climate protection

Germany’s move to raise the surcharge it levies on electricity consumption ("EEG Umlage") by about 5.5% next year is “counterproductive for climate protection”, Frankfurt-based chemical producers’ trade group VCI said on Tuesday.

The EEG-Umlage helps fund the country's transition towards renewable energy sources (Energiewende).

The federal network agency for electricity, gas, telecommunications, post and railway (Bundesnetzagentur) earlier on Tuesday announced the increase in the surcharge to 6,756 euro cent/kWh for 2020, from 6,405 euro cent/kWh in 2019.

“Our recent VCI study on greenhouse gas (GHS) neutrality shows that climate protection needs internationally competitive electricity prices,” said VCI director general Wolfgang Grosse Entrup.

According to the study released last week, emissions-free technologies for the production of basic chemicals are economically possible by 2050 – but only if large volumes of renewable electricity are available at competitive prices.

As such, “the increase in the EEG levy goes in the wrong direction, electricity prices must be reduced, not increased,” the VCI official said.

Germany needed “an overall energy policy strategy that ensures both the orderly expansion and a cost reduction for renewable electricity", he said.

On  a more positive note, Grosse Entrup noted that as part of the government’s recently agreed “climate protection programme 2030” it signaled a willingness to drive the expansion of renewable energies with direct government financing.