German Carbon Leakage Regulation makes it all worse

Date: 06.04.2021Source: German Yeast Industry Association

Today, the German government adopted a Carbon Leakage Regulation. This is intended to protect energy-intensive and internationally competitive companies from excessive CO2 costs and thus prevent them from relocating.


Dr. Gerhard Brankatschk, Managing Director of OVID, the Association of the Oilseed Processing Industry in Germany, said: “The new regulation is actually intended to protect companies with a high carbon leakage risk from relocating abroad. However, the current draft fails to achieve this goal. We expect the German Bundestag to prevent the migration of systemically important food manufacturing from Germany by ensuring sufficient compensation.”


According to the recent study “Potential Impact of National Fuel Emissions Trading on Carbon Leakage and Competitiveness” by the German Federal Ministry of Finance, industries are at concrete risk of being relocated abroad as a result of National Fuel Emissions Trading. “The German government has not taken this into account adequately today,” said Dr Brankatschk.


Dr Markus Weck, Managing Director of the German Yeast Industry Association, additionally points out the imbalance of the compensation scheme: “Our member companies have been investing in energy-efficient systems and processes for years and produce at the highest level. The investments already made are completely ignored if further climate protection measures are now made a condition for the payment of the subsidy. The last percentages of optimisation are the hardest to achieve – and the most costly.”


Michael Lerch, Managing Director of the German Maltsters’ Association, adds: “This scheme will now benefit companies that have so far invested to a lesser extent in energy efficiency measures.”

Roland Sossna / IDM

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