Stimulus package to expand: chemical industry, electricity costs, jeopardize Jobs

Under pressure from falling orders in the Corona-crisis, the chemical industry fears for the future of many medium-sized businesses, and price reductions for Electricity.

The situation is escalating, with consistently high costs, might make some companies complete sites in question. “All the companies try to keep the level of employment. But at the Moment no one can foresee whether this will work in the end,” said the managing Director of the industry Association VCI for the North of Germany, Jochen Wilkens, the German press Agency.

Member companies in the Federal Republic as a whole would lose business, while the world market with products from Asia is more than saturated. The significantly increased Import exercise additional pressure on the sites, warned the Association of chief Detlev Wösten. “Therefore, moderate measures to reduce the working hours are often hardly possible.” Also car suppliers to be at risk: “the supply chains for a significant part of the decline in Orders.”

Remedy could create costs according to Wösten lower energy – not a new requirement, but one that gains is now important. “The EEG surcharge does not have to be capped. This is a first step, but in the end we need more than a slight relief.”

The levy, the consumer in industry and the promotion of the green power development holding Fund, is to be reduced from 2021 through grants from the Federal budget. It compensates for the difference between market electricity prices and feed – in tariffs for operators of wind turbines or solar plants. Because power in the wholesale trade was due to the Corona-crisis cheaper and producer prices are guaranteed, with the cost gap is getting bigger.

“Is the presence of plenty of renewable energy, of course, important,” said Wösten. “But this must be done on competitive terms. We hope that there is, at the latest, in the autumn of further initiatives from the policy.” The stimulus package would have to be amended. So far, it is planned that revenue from the new CO2 price, the EEG levy is to relieve.

The VCI, the Association had voices also advocated further steps: “The content and the Timing for the package. It jumps but not too short, because it is not a growth program for the necessary Transformation in Germany.” The head of the Union IG BCE, Michael Vassiliadis, has called the Federal subsidies for the green electricity levy “overdue”. Thus, it was not done. “Now the entry in the switchover is made, further steps must follow.”

In General, many chemical companies were concerned, said Wösten. “The tighter competition situation is in the Corona-crisis, more come to light.” From large companies to medium-sized companies, 70 percent reported declines in Orders, 40 per cent of heavy losses. This could radiate due to the high interconnectedness with other sectors, warned Wilkens. “40 percent of foundry chemicals go into the engine casting, a large part also in the wind turbine production.” Would add machinery and shipbuilding.

The pharmaceutical division was started in view of the increased demand for medicines last only briefly, a lot of people would want, with basic ingredients, stock up. “Therefore, we expect that we will have in the next few months, more declines.” A return of basic drugs from China and India is not easily possible. “Often the production of drugs is no longer profitable in Germany. We need to keep the existing production in Europe, maybe we can get back to certain antibiotics.”