Political wrangling over temporary electricity price cap

The small and medium sized German industrial companies represented by the Alliance for a Fair Energy Transition (Bündnis Faire Energiewende; BFE) feel that the political back-and-forth and indecision in the debate on competitive energy prices is a farce.

Industrial SMEs urgently require energy price relief or will otherwise face serious adverse consequences. The federal government and many members of the country’s lower house of parliament, the Bundestag, don't yet understand. “The noose is growing tighter and tighter around the necks of energy-intensive industrial SMEs. If even more businesses have to shut down, entire supply chains in Germany will collapse,” says Christoph René Holler, spokesman for the BFE and CEO of the German Ceramic Industry Association (BVKI).

The country’s ruling coalition has so far neglected to guarantee competitive energy prices, whereas other EU countries took action to address this issue a long time ago. As a result, the BFE is demanding the expansion of Germany’s temporary electricity price cap to SMEs, the reduction of energy taxes and grid usage fees, and the suspension of the national carbon price. This is the only means by which the federal government can safeguard the investments in Germany as a centre of industry and radically change course.

“If there is no solution on energy costs for manufacturing companies, the lights will go out very quickly in many regions of Germany. Federal Economic Affairs Minister Robert Habeck must finally act on gas and electricity if he wants to safeguard our industry at home,” says BFE spokesman Holler. Introducing an industrial or temporary electricity price cap that provides no relief for the majority of German manufacturing plants would be nonsensical. Taking this type of step would be a bid to deceive the public. “Policy-makers must start thinking in terms of value chains – sacrificing entire industrial sectors in Germany is not a wise way to govern. For that reason, as well as the need for a temporary cap to ensure affordable electricity, relief on gas prices is also imperative,” adds Holler.

The BFE is calling for relief for industrial SMEs as long as green energy remains insufficiently available and affordable. The high energy prices threaten the existence and competitiveness of many businesses that are important for the transformation Germany is undergoing. They will either have to close down or move abroad. Holler warns that this path will lead to de-industrialisation, putting Germany in a dangerous situation of dependency.