Germany Set to Cut Rebates for Companies That Generate Own Power

Germany is set to reduce the number of companies being exempted from an environmental levy to appease European Union competition concerns and spread the costs of clean energy more fairly, a senior coalition lawmaker said.

While companies that fire generators with their own gas byproducts, such as BASF SE (BAS) and steelmakers, should pay a reduced EEG-Umlage levy as they’re vital to the economy, others “abuse” the rule and should pay in full, said Hubertus Heil, energy policy spokesman for the Social Democrats.

The levy, which helps finance the country’s clean-energy expansion, jumped 18 percent to 6.24 euro cents a kilowatt-hour this year, driving up bills that are the second-highest in the EU after Denmark. The exemptions are blamed for helping to inflate costs for other consumers and have aroused competition concerns from the European Commission.

“We are trying to find a proportionate, adequate solution in talks with German industry but also know that the European Commission has set its eyes on self-generation of power,” Heil said in an interview in Berlin this week. Existing plants may be treated differently from new ones, he said, without elaborating.

The government has previously said it wants to charge owners of new fossil-fuel plants 90 percent of the levy and 70 percent for clean-energy units, combined-heat-and-power plants and generators fired with gas byproducts. Currently, owners of all plants consuming their own electricity are exempt from the EEG-Umlage.

Some 50,000 companies would have to start paying the fee if the rules are changed, the DIHK trade chambers group said on its website. That may add 500 million euros ($684 million) to annual costs, the Frankfurter Allgemeine Zeitung reported Feb. 11.

To contact the reporters on this story: Brian Parkin in Berlin at bparkin@bloomberg.net; Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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