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Germany aims to support industry via tax relief, CCS


24 Oct 2023 16:03

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Photo: Andreas Lochner

Isaac Bah


24 Oct 2023 16:03

(Montel) Germany’s economy ministry aims to help energy-intensive industry cope with higher energy prices via tax relief measures and decarbonise via carbon capture and storage (CCS), it said in a new plan on Tuesday.

In addition to the relief already provided to small and medium-sized enterprises, a power price cap for energy-intensive industries would be necessary, the ministry said in the strategy paper. Earlier this year, economy minister Robert Habeck suggested a cap at of EUR 60/MWh.

Otherwise, there could be a fall in production or migration of structurally competitive companies from Germany, it added, which would have negative effects on value chains throughout Europe.

Therefore, preventing this scenario was “not only in Germany’s interest, but in the interest of the whole of Europe, both economically and in terms of security policy”.

“The bridge is not yet in place for energy-intensive companies to safely reach the other shore of competitive industrial electricity from renewables,” said Habeck.

However, he said he was aware that such measures were controversial within his coalition government, as well as with other EU members.

He told Montel he had presented a plan for an industrial power price cap in May and yet now, “in mid-October… I cannot give a forecast when a decision will be made and how it will turn out,” with the chances remaining at 50:50.

However, he saw other ways of lowering energy costs, such as extending tax relief on power prices set to expire at the end of the year.

Climate action
The plan also proposed measures to support the industrial transition to net zero.

Germany could only achieve its climate targets if it were to use CCS and CCU (carbon capture and utilisation) technologies, according to the plan, with CCS necessary for areas that had little technological possibility to reduce carbon.

The technology has proven controversial in Germany to date amid environmental concerns among members of the public. However, it is at an advanced stage in Norway, the Netherlands and Denmark.

The ministry said the government would work with European partners to promote the application of CCS and CCU.

Habeck will discuss the plan with industry leaders at an industry conference next Tuesday.

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