Germany to help companies shoulder higher power costs

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New leader of the German Green party, Habeck, attends a news conference at the party headquarters in Berlin

FRANKFURT -Germany will support companies struggling to cope with higher energy costs that threaten to hurt industries with large power consumption, Economy and Climate Minister Robert Habeck told an industry conference on Tuesday.

This, he said, would include payments to offset higher costs to avoid carbon emissions, Habeck said, adding building decarbonised supply chains was the only chance for Germany to keep key industries alive.

“There should be no lack of government support. Of course, we don’t want to over-support either. But the companies that now want to make the switch should be supported and compensated for the prices that cannot be realized on the market,” Habeck said.

So-called carbon contracts for difference, which essentially compensate firms for higher costs as a result of decarbonised production, are expected to account for a mid-triple digit billion euro amount, Habeck said.

Once production – which can include cement, steel and chemicals – has reached a competitive level, a part of the cost will be paid back to the state, Habeck said.

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“There will be a tipping point at some stage because CO2 prices will rise and certificate trading will go up. Production will become cheaper as a result,” he said.

(Reporting by Christoph Steitz and Vera EckertEditing by Madeline Chambers)