German Energy Plan to Boost Steelmaker Costs, Industry Says

German steelmakers face a 72 percent jump this year in costs associated with the nation’s renewable- energy subsidy plans and rule changes to Europe’s carbon market, according to an industry lobby group.

Costs will surge to about 621 million euros ($838 million) from 362 million euros last year, Hans Juergen Kerkhoff, president of the Wirtschaftsvereinigung Stahl German steel association, said today in an interview in Dusseldorf without providing details.

German Environment Minister Peter Altmaier’s plan to shift the burden of renewable subsidies to industry from households may boost steel companies’ energy costs by 50 percent to about 400 million euros this year, Kerkhoff said. Altmaier also supports a European Union proposal to restrict sales of carbon emission permits to fix a glut that pushed the cost of the certificates to record lows.

Connie Hedegaard, the EU’s climate-auction commissioner, said on her Twitter Inc. account yesterday that emissions trading made up a maximum 2 percent of steelmakers’ total costs. Some metal companies earned millions of euros from free carbon allowances, she said. ArcelorMittal, the world’s biggest steel producer, earned $210 million from carbon permits in the fourth quarter, the company said Feb. 6.

The German industry will have 13 percent fewer permits than it needs to cover emissions over the next eight years, placing it at a disadvantage against global competition, Kerkhoff said.

Altmaier proposed on Jan. 28 freezing the renewable energy surcharge consumers pay at the current level in 2014, and said any increase thereafter should be limited to 2.5 percent a year.

The minister is seeking to reduce and limit energy- intensive industry exemptions from surcharges and possibly cap the amount of rebated power they get. These industries have already benefited from falling power prices, he said.

To contact the reporters on this story: Tino Andresen in Dusseldorf at tandresen1@bloomberg.net; Mathew Carr in London at m.carr@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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