German chamber of commerce calls for CO2 price delay due to corona crisis

The introduction of Germany's national CO2 price in the transport and heating sector should be delayed by two years in order to take pressure of businesses trying to stay afloat amid the economic lockdown in response to the outbreak of the novel coronavirus, Germany's Chamber of Industry and Commerce (DIHK) has said. In a position paper on the corona crisis' impact on the energy sector, the DIHK said the expected drop in emissions this year would "make further climate policy measures unnecessary for the time being," arguing that regulatory relief during a "transitional period" would help the industrial sector to cope with the virus' fallout.

Moreover, declining wholesale power prices caused by the falling electricity demand could cause operators of renewable power installations major revenue losses, and thus lead to an increase of the renewables surcharge on the power bill, the DIHK said. The surcharge (EEG Umlage) might have to rise by seven percent in 2021 to make up for expected losses of about 1.7 billion euros in surcharge earnings for operators this year. It currently stands at 6.75 cents per kilowatt hour (kWh). The DIHK warned that the increase must not be passed on to consumers who are already struggling to weather the current loss in revenue, arguing that higher power prices could be cushioned by grants from the state budget. The chamber also said that the corona crisis must not be used as a "pretext" to slow down the much-needed expansion of renewable energy sources in Germany, adding that longer implementation deadlines and other regulatory relaxation are needed.

Please note: in a later version of its position paper, the DIHK dropped any reference to a postponement of carbon pricing and merely recommends "comprehensive carbon-leakage regulation" to reduce costs for small and medium-sized industrial companies. The first version had been a working paper only, a spokesperson for the DIHK said.