Germany and the European Commission have agreed to keep exemptions of German heavy industry from green energy surcharges, but on a smaller scale, German media reported Tuesday.
According to the agreement reached after months of wrangling in Berlin and Brussels, the number of energy-intensive German industrial companies that could get discounts on green energy surcharges will be reduced from 2,100 currently to 1,600, German Economics and Energy Minister Sigmar Gabriel was quoted as saying.
Germany's Renewable Energy Act (locally known as EEG), the main pillar of the country's energy transition from fossil fuels and nuclear power to renewable energy, establishes guaranteed feed-in tariffs for all electricity generated by renewable energy sources. The gap between the market price of electricity and this fixed tariff is filled by renewable energy surcharges paid by electricity users.
However, big energy users in Germany have been excluded from paying the surcharges so far. More than 2,100 companies were reportedly granted discounts last year with a total worth of 5.1 billion euros (about 7 billion U.S. dollars).
The European Commission was looking into whether such discounts were giving Germany's industry an unfair advantage over rival companies in other EU countries.
The dispute between Berlin and Brussels has unsettled energy-intensive industries in Germany, which may have to halt investment or even move production abroad if the higher costs of power make them uncompetitive.
Under the agreement reached between the two sides, 65 industrial sectors were singled out and will have to pay 20 percent of the green energy surcharge in the future, but only up to a maximum of 4 percent of gross value added (GVA) -- the total value of produced goods with costs subtracted. The commission had wanted a cap of 5 percent originally.
Moreover, the cap for particularly energy-intensive industries, such as aluminum and copper, would be 2.5 percent of the GVA. Berlin was also granted scope to reduce the cap to 1 percent for some sectors.
Final details of the deal would be presented by the European Commission on Wednesday when it unveils its new guidelines on industrial rebates.
For that reason, the German cabinet did not pass any measure on industry rebates on Tuesday when it endorsed a reform to the EEG law in a bid to curb rising electricity prices in Germany. Gabriel told media that new rules regarding industry rebates in Germany are to be set in May.
Since energy-intensive enterprises are exempted from paying the green energy surcharge, other consumers have to pay more. Currently, German households and smaller companies pay some 23 billion euros (about 32 billion dollars) each year to help subsidize the country's renewable energy program.