According to a press release by Federal Association for Secondary Raw Materials and Waste Management (BVSE), a coalition of German trade associations, led by the BVMW (the association for small and medium-sized enterprises) and supported by numerous entities from the metallurgical, logistics and waste management sectors, has issued a statement warning the German federal government that the energy and mobility cost crisis is spiraling out of control, directly threatening the future of industry in Germany.
While the associations acknowledge the government’s interventions, they state, “The temporary reduction in the energy tax on petrol and diesel is an important first step towards providing relief for small and medium-sized enterprises, but it is by no means sufficient. Further targeted relief measures must now be introduced swiftly.”
According to the statement, geopolitical tensions are fueling price volatility that affects the entire industrial and service-oriented value chains. Small and medium-sized enterprises (SMEs) are the more severely affected by this crisis. Unlike large companies, SMEs have fewer tools to protect themselves from price fluctuations and are often unable to pass on cost increases in full to customers.
“Costs are partly politically driven”
According to the associations, the current crisis is not an unavoidable natural disaster. A significant portion of energy and mobility costs are determined by taxes, government levies and regulatory frameworks. “Merely pointing to international market developments falls short,” the statement reads.
The result is a drastic tightening of margins and investment capacity, which risks causing a decline in competitiveness and investments, the relocation of production abroad, and the accelerated deindustrialization of the country.
Five-point action plan
To stabilize the situation, the associations propose five concrete steps:
- Cutting state-imposed costs: Permanent reduction of energy, electricity and fuels taxes to the European minimum, a review of additional CO2-related costs and the provision of targeted aid to sectors dependent on affordable mobility.
- Safeguard investments: Development of existing support measures for SMEs, implementation of mechanisms that effectively mitigate short-term price increases, creation of a reliable regulatory framework for investments, and reintroduction and extension of price adjustment clauses in public procurement to protect businesses from extreme raw material price volatility.
- Securing supply: Strengthening domestic raw material extraction through accelerated approval procedures, use of strategic reserves and consolidating European cooperation on the supply of raw materials.
- Implementing moratorium on new burdens and introducing relief measures: Avoiding the introduction of further cost multipliers and unilateral national measures that alter competitiveness.
- Adopting a pragmatic approach to transition: Energy policy must be technologically neutral, and the ecological transformation must remain economically sustainable.
Ultimatum to the government
In conclusion, the signatories urge the federal government to act as soon as possible by implementing relief measures in the short term, eliminating competitive disadvantages, and ensuring supply and planning certainty for businesses.
In a context where competitiveness and value creation are at risk, the associations warn that there is no more room for tactics or delays. “The federal government must now take decisive action to safeguard the economic viability of small and medium-sized enterprises,” the associations state.
