* SPD: EU to probe industry exemptions on green charges
* Industry lobby wants reform to avoid EU intervention
* Warns EU action would destroy German "industrial core"
* Government denies reports it will scrap discounts
(Adds environment minister, company comments)
By Matthias Inverardi and Markus Wacket
DUESSELDORF/BERLIN, Nov 6 A leading Social
Democrat warned on Wednesday that the European Union planned to
investigate German renewable energy discounts for industry, a
move that could end up hitting a raft of companies operating in
Europe's biggest economy.
The VIK industry lobby for heavy energy users urged the
German government to stave off EU action, warning it could
saddle companies with billions of euros in additional costs and
"destroy Germany's industrial core".
Hannelore Kraft, state premier of North Rhine-Westphalia,
acknowledged that firms operating in Germany would need to move
quickly to set aside provisions if EU Competition Commissioner
Joaquin Almunia opens a probe.
Germany collects surcharges from power users to help fund
operators of solar and wind power installations. Heavy
electricity users such as cement, steel and some chemical plants
are exempt to keep them from being priced out of the global
Brussels believes this could distort competition.
"We see big risks," Kraft told reporters in the state
capital Duesseldorf. "If companies have to build reserves, this
could cause a precarious situation for some of them."
Kraft and Environment minister Peter Altmaier, who are
leading the negotiations on a new German government's energy
policies, are due to travel to Brussels on Thursday to meet with
Almunia and discuss the matter.
Spokespeople in Almunia's office declined comment.
Altmaier, of Chancellor Angela Merkel's conservatives, said
he was convinced that Brussels shared his interest in upholding
Germany's economic strength, but added that some of the 2,300
companies in the exemption scheme may not deserve the breaks.
"We must concentrate on companies that compete in the global
market (safeguarding their competitiveness), but scrutinise
other cases," he said.
A scrapping of the renewable funding discounts could have a
big impact on manufacturing companies, which gave a mixed
response to news of the Brussels plans.
Steelmaker ThyssenKrupp declined to comment while
copper refiner Aurubis said it was confident it was
not among candidates to be struck off the list, due to its high
energy use and presence in global markets.
Chemical company Evonik said it was not building
up any pre-emptive reserves as the outcome was unclear.
A document made available to Reuters on Tuesday suggested
the government was prepared to reduce the discounts by more than
1 billion euros ($1.35 billion).
The German government denied any plans to do away with the
discounts, with the environment ministry describing the document
as "an information paper at a technical level, which the
minister did not approve".
"It was not part of (coalition) negotiations and will not be
implemented in this shape," the ministry said in a statement.
Energy policy is a central theme in ongoing coalition talks
between the conservatives and the SPD. Both parties agree on the
need to reform Germany's renewables law (EEG), which has led to
runaway energy costs for consumers.
VIK said a reform of the EEG was extremely urgent. They hope
that such a reform will lower energy costs, reducing the need
for industry discounts and retaliatory action from Brussels.
"State aid proceedings would force Germany to levy full
renewable support charges on companies with immediate effect and
maybe even retroactively," it said.
"In such a case companies would be faced with additional
payments amounting to many billions of euros, which would
destroy Germany's industrial core."
The green energy subsidy system has become a victim of its
own success, as consumers are hit by ever rising surcharges to
fund generous 20-year price guarantees to operators of renewable
($1 = 0.7421 euros)
(Additional reporting by Annika Breidthardt and Vera Eckert in
Frankfurt, Tom Kaeckenhoff in Duesseldorf, Jan Schwartz in
Hamburg and Tom Koerkemeier in Brussels; Editing by Noah Barkin
and David Cowell)