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German energy tax hikes seen hurting metals makers

22.10.2002
Obecné
German energy tax hikes seen hurting metals makers
BERLIN - Plans by Germany\'s red-green coalition government plans to raise energy-related taxes threaten the country\'s metals industry, industry association WVM said in a statement issued late last week.
Plans to phase out exemptions to the controversial \"eco tax\" on gas, gasoline and power that had been granted to energy-intensive industries could cost the base metals industry an extra 360 million euros ($350.2 million) a year, it said. \"Some companies might incur additional costs of 80,000 euros per metals industry job (if the exemptions were ended completely),\" it quoted WVM president Werner Marnette as saying. \"This would be the death knell for German aluminium smelters and a significant threat to other parts of the base metals industry,\" said Marnette, who is managing director of Europe\'s largest copper smelter Norddeutsche Affinerie (NA) . Energy costs amount to some 40 percent of production costs in aluminium and some 20 percent at the NA. WVM represents the world\'s third largest metals industry with 670 companies and sales last year of 27.15 billion euros, which employs 113,600. News of the plans are still vague as the government, re-elected on September 22, aims to raise finance for its spending plans via new taxes and subsidy cuts, but it has said it would cut the exemptions gradually from January 1, 2003. Marnette, who is also chairman of the energy committee of the main German Industry Federation (BDI), said the exemptions had been granted in return for promises by German industry at large to reduce carbon dioxide (CO2) emissions. This was part of a deal with the government aimed at enabling Germany to meet its ambitious climate protection targets at international level. \"The industry kept its promises and cut CO2 emissions by 30 percent since 1990,\" the statement said. \"The industry kept its part of the bargain but fears that the government wants to end the deal.\" WVM also criticised the government\'s decision to move responsibility for renewable energy from the economics ministry to the environment ministry as \"counterproductive.\" Subsidies under the renewable energies law (EEG) already cost the base metals industry 45 million euros a year, WVM said, demanding the government cap the total cost per firm. The costs, which are paid to renewable energy companies for feeding power into the national grid, could not be passed on. REUTERS NEWS SERVICE
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