Electricity pylons and wind turbines stand beside the RWE Niederaussem coal-fired power plant while Steam rises from cooling towers on February 16, 2016 near Bergheim, Germany.
Volker Hartmann | Getty Images News | Getty Images
A transition to greener industry has become a priority in Europe but the head of a major German energy producer said there needs to be a “level playing field” so the region’s companies can compete globally.
“What we need is a global level playing field,” Markus Krebber, chief executive of RWE, the biggest producer of energy in Germany, told CNBC on Monday. “[Otherwise] it will be very difficult to compete with CO2-intensive imports when you are forced, in Europe, to decarbonize your industries.”
“It needs to be clear that, whatever politicians come up with [in terms of] a regulatory framework, we need to keep that level playing field otherwise we risk not only losing jobs but also risk losing the acceptance of our societies,” he added.
Germany’s government has recently increased its carbon emission cutting targets, with Chancellor Angela Merkel’s cabinet approving draft legislation in May that aims to see carbon emissions cut by 65% from 1990 levels by 2030. The country is also aiming to be carbon neutral by 2045.
Germany’s emission levels are already 40% lower than they were in 1990, according to the country’s environment minister.
The more ambitious government targets have been set amid an upswing in support for Germany’s Green Party, which polls suggest is likely to become a partner in a coalition government following a federal election in September.
RWE’s Krebber said that, in the long-term, he was not concerned by government policies aiming at “greening” industry because the public supported the transition.
“If it’s wanted by the consumer and he pays for it you don’t need a support scheme, you just need a regulatory framework. But that will not happen overnight,” he noted.
“So I think that, in the beginning, we need support. But I would really urge everybody to think about market-based systems and not direct subsidies, which are not based on a competitive process, because we cannot risk to implement very expensive technologies in Germany. We currently have the highest power prices across Europe.”