FRANKFURT, Germany—The German rubber industry association WDK has warned that a national emissions trading program will have "irreversible consequences" for more than 10,000 medium-sized industrial companies in the country.
In a June 18 statement, the Fair Energy Transition Alliance, which also includes WDK, said the carbon pricing plan starting next year could lead to emigration of business, job losses and reduced value-creation among energy-intensive industries.
In its appeal, the alliance warned that the initiative would not help recovery plans from COVID-19 pandemic and will instead "worsen its effects."
"Germany cannot leave its medium-sized industry out in the cold when it comes to energy prices," said Uwe Mazura, general manager of the Association of the German Textile and Fashion Industry.
He warned that the new emissions trading system along with the high electricity prices will drive thousands of companies into bankruptcy and production abroad.
"That would not help the climate; itwould harm it!" he added.
The alliance recommended that "disadvantageous" energy and climate policy in Germany should be put to the test and remedied.
"For example, national emissions trading may only enter into force once the necessary relief regulations for the companies concerned have been adopted and are effective," it added.
This, for instance, means that electricity should not be expensive if companies are being forced to switch from coal, oil and gas to electricity.
The alliance also is seeking relief for electricity-intensive companies that switch to renewable energies.
Presented in 2019, the national program requires companies active in the heating and transport sectors and trading fuels to pay for their CO2 emissions. A fixed carbon price would begin at about $11 per metric ton, which rises to about $40 per metric ton in 2025. Thereafter, prices will be allowed to float up to a ceiling of about $68 per metric ton, according to commodity market new website Montel.
The move is part of Germany's ambitious plan to become greenhouse gas neutral by 2050. The country has set the preliminary target of cutting emissions by at least 55 percent by 2030 compared to 1990 levels.