German Companies Express Concerns Over Energy Transition’s Impact on Business
Published · 3 min read
German companies are increasingly voicing their apprehensions regarding the energy transition’s success, commonly known in Germany as the “Energiewende.” A recent survey conducted by the German Chamber of Industry and Commerce (DIHK) has shed light on the growing unease among businesses, with over half of the respondents indicating a negative impact on their operations.
Achim Dercks, the Deputy Chief Executive of DIHK, revealed these concerns during a press conference held in Berlin. The survey gathered insights from nearly 3,600 companies and highlighted the wavering faith in the energy transition’s potential benefits. A startling 52% of the surveyed companies expressed that the transition towards climate neutrality was either negatively or very negatively affecting their business prospects. In contrast, only 13% believed the transition had a positive impact.
The energy-intensive industries appear to be particularly impacted, with a staggering three-quarters of companies within this sector reporting negative effects. The DIHK’s Energy Transition Barometer, which has been tracking sentiment since 2012, currently stands at a concerning -27 points on a scale from -100 to +100. This marks a significant decline from the previous years, reflecting the mounting doubts within the business community.
Achim Dercks highlighted the shifting sentiment, stating, “While companies used to see opportunities in the energy transition, the risks now outweigh the opportunities in the assessment of the economy as a whole.” He noted that concerns about potential energy shortages in the medium and long term were contributing to the prevailing unease.
The survey results also indicated that nearly one-third of industrial companies were considering or had already initiated plans to relocate production capacity abroad or reduce production at home. This represents a substantial increase compared to the previous year, indicating a growing trend of international relocation due to concerns about competitiveness.
Germany’s long-standing reliance on gas and oil supplies from Russia has also contributed to the unease, particularly in the aftermath of the Russian attack on Ukraine in February 2022. The resulting energy cost spikes have exposed vulnerabilities in the country’s energy supply chain, prompting further skepticism among businesses.
German Economics Minister Robert Habeck, a member of the Green Party, reiterated the importance of addressing these concerns. He advocated for an industrial electricity price subsidy to mitigate rising electricity costs until 2030. Habeck’s proposal aimed to support around 2,500 energy-intensive companies that might otherwise consider moving their operations abroad. However, his plan faced opposition from Chancellor Olaf Scholz and Finance Minister Christian Lindner due to the substantial cost implications.
The DIHK’s survey revealed that the inclination to relocate was most pronounced among larger industrial companies, especially those with over 500 employees. Around 43% of such companies were either planning to relocate or were in the process of doing so. Often deeply integrated with foreign markets, these businesses face heightened competition in choosing their operating locations.
To address the mounting concerns, Achim Dercks called for comprehensive measures, including electricity price relief for all companies, reduced bureaucracy, and swift availability of hydrogen – a crucial element in achieving climate-neutral industrial processes.
As Germany grapples with these challenges and uncertainties, policymakers and industry leaders must navigate a complex landscape to ensure a smooth transition toward a more sustainable energy future while safeguarding the vitality of its industrial base. The current sentiment within the business community underscores the urgency of addressing these concerns and finding effective solutions to secure Germany’s economic stability amidst the evolving energy landscape.
