Draft by IG Metall Industrial Union of Metalworkers and IG Bergbau, Chemie, Energie Industrial
Draft by IG Metall [Industrial Union of Metalworkers] and IG Bergbau, Chemie, Energie [Industrial Union of Mining, Chemical and Energy Workers]
for a position by the industriAll European Trade Union
as part of the consultation launched by the Commission’s Directorate General for Competition on draft rules for state support in the energy and environmental field
The single internal market and the European energy policy belong to the foundations of the European Union. However, they should not stand isolated, but must contribute to a sustainable, competitive and employable economy with good jobs.
The development and promotion of renewable sources of energy must continue to progress in Europe, without any threat to jobs. The Guidelines on environmental and energy aid must therefore be compatible with the goal to revitalise European industry, climate goals and the expansion targets for renewable energy sources.
The draft Guidelines on environmental and energy aid, submitted on 18 December 2013, do not bring the EU Commission any closer to its goal of revitalising European industry.
The guidelinesencroachseverely on existing,reliable national support systems and thus endanger a stable and continued further development of renewable energy sources. Under particular threat are energy-intensive companies exposed to international competition, especially in Member States that incur comparably high costs to promote renewable energy sources and pass them on to electricity consumers. The implementation of the State aid guidelines in the proposed form would threaten an investment backlog for plant construction in renewable energy sectors and an exodus of highly energy-intensive companies.
The following points are in need of fundamental revision:
I. The task of the environmental and energy guidelines is to provide a level playing field for the EU market. The current draft, however, goes far beyond defining framework conditions. The aim of State aid guidelines cannot be to dictate to Member States the concrete form of their support schemes in detail. The restriction of the current support schemes for renewable energy sources in the present draft to certain models such as quotas or market premiums and the obligation of tendering models is consequently not advisable. Compensation for electricity fed into the grid, as can be found in most Member States today, must be possible in the future too.
The commitment to a technologically neutral support system as a matter of principle should be looked at particularly critically. A restriction to the current lowest-cost technology falls short andhinders the development of a broad range of technologies for a future energy supply based on renewable sources. This could even entail higher costs in the long run. A support system must therefore do justice to the conditions of different renewable energy technologies, because only then can further technologically efficient progress be made, also in such fields as offshore wind projects, as was already made in the field of onshore wind energy in the past.
The State aid rules must be formulated in such a way as to enable the individual Member States to continue to develop their support schemes, instead of forcing short-term adjustments without having the requisite practical experience. That is the only way to achieve planning and investment security for plant construction in the renewable energy sector and thus secure industrial employment in Europe.
II. State aids to promote renewable energy sources and regulations to limit them for energy-intensive companies should under no circumstances be more conducive to precarious forms of employment such as temporary work and contracts for work labour, than to regular, insurable, normal employment relationships. Companies must not, however, obtain a limitation of a Renewable Energy Act levy through an enhanced use of temporary and contracted workers, unlike other companies who employ their own personnel. For that reason, costs for temporary and contracted workers should be treated no differently than own personnel costs when calculating the gross value added.
III. Energy-intensive companies are exposed to international competition with their products inside and outside the EU. Limitations to the allocation of costs for the promotion of renewable energy sources and compensatory adjustments must be admissible as such, in order not to put them at a disadvantage in that respect.
Innovative products constitute a precondition for the successful development of industry, the economy and employment in the EU and its Member States. Well-functioning value chains are consequently needed in order to continue to develop and to produce them in Europe. The raw materials industry is a necessary pre-condition for a well-functioning value chain, as it is the only industry that can ensure innovative research networks in Europe. To that end, an essential pre-condition is, and remains, round-the-clock electricity supply at internationally competitive prices. For the energy-intensive industry, the compensation of electricity price increases due to political measures is required by encouraging the development of renewable energy sources also, in order to continue to be competitive and to secure employability.
When assessing international competitiveness, competition inside and outside the EU, the cost-related aspects of the corresponding value chains,as well as the virtually harmonised price fixing on commodity exchange,must all be taken into account.
Threshold values for accessing a limitation of the cost burden for the promotion of renewable energy sources and for the amount of such limitation must include escalation clauses, so that operational energy efficiency gains at fixed thresholds come to nothing.
IV. Comments on particular sections in the draft State aid rules:
On section 181:
The wording “In principle, all energy consumers should bear the costs…” is open to interpretation. In any event, a tax-financed promotion of renewable energy sources should not be taken out of the environmental and energy aid rules, nor should efficiency-conducive, industrial own power generation be burdened with the costs for the promotion of renewable energy sources.
On section 184:
The rules must ensure that a limitation of costs for the promotion of renewable energy sources is granted only for really relevant and intensive power consumption quantities. On the one hand, the proposed list of sectors is not sufficiently selective, and on the other, does not comprise all electricity-intensive plants threatened with relocation. We therefore propose, as an access criterion, to limit the costs for the promotion of renewable energy sources. The plants must be able to fulfil the following criteria as an alternative:
a.Rise in costs with regard to the gross value creation and intensity of trade inside and outside the EU to a relevant extent or,
b.Rise in costs to a great extent with regard to the gross value added, or
c.Particularly high intensity of trade inside and outside the EU and rise in costs above a minimum threshold.
On section 186 a:
The proposal to pay at least 15% of the additional costs for the promotion of renewable energy sources entails burdens beyond achievable profits for particularly electricity-intensive companies. The cost burden for the promotion of renewable energy sources should be limited to a share of the gross value creation that enables the company to remain competitive.
On section 186 b:
Requiring compensation payments as an annual lump sum retroactively is counterproductive, as it forces companies to resort to pre-financing,with varying levels of blatancy, and their competitiveness would be sharply impaired as a result.
Detlef WetzelMichael Vassiliadis
President, IG MetallPresident, IG BCE
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