Ensuring Industrial Competitiveness with a Unified European Approach to Sustainable Energy

Abstract

German energy-intensive and highrevenue companies are postponing investments due to energy policies and the regulatory framework. Although this applies only to a number of companies, it shows that rising costs and uncertainty about the future energy policy agenda influence companies’ decisions to invest. But only a few companies are planning to intensify foreign investments for these reasons. However, the present rules installed to prevent carbon leakage are limited in time and are in danger of becoming modified particularly at the expense of energy-intensive companies. Such uncertainties and unilateral strains that are restricted to Germany or Europe are a threat to innovations and the necessary investments which industries here need to make for low carbon and more efficient production. In order to achieve the energy transformation targets, there is a need for efficient measures that limit total expenditures as far as possible and prevent domestic companies from unilateral cost burdens.

Parts of this paper are based on Bardt and Schaefer (2017).