German unions warn of job losses due to high electricity prices

BERLIN (AA) — Hundreds of thousands of jobs are at risk in Germany due to high electricity prices exceeding international standards, industrial unions warned on Tuesday.

Energy-intensive sectors like steel, chemicals, and building materials are particularly vulnerable to job losses and site closures, according to a joint statement by unions IG Metall, IGBCE, and IG BAU.

Calling for nationwide protests on Thursday, the associations hope to push their demand for internationally competitive industrial electricity prices and long-term predictability of power costs. Several dozen public and company actions and rallies are planned.

Economy Minister Robert Habeck of the Green Party had announced in advance that he would present proposals for a state-subsidized industrial electricity price in the first half of the year.

German industry has been complaining for several months about domestic energy costs being higher by international standards. Though government measures are now in place to stop the price rise, unions say these would only dampen the increase.

"The German government must intervene to steer the price of industrial electricity," demanded Jorg Hofmann, first chairman of the IG Metall trade union.

He added: "Otherwise, steel production, the aluminum industry and other energy-intensive sectors risk disappearing from Germany sooner or later."

According to the unionist, this would "directly and indirectly affect hundreds of thousands of jobs." IGBCE chairman Michael Vassiliadis explained that energy demand was particularly high in the chemical or paper industries.

"At the same time, they are at the beginning of almost all industrial value-added processes. If they close plants and relocate production because of high electricity costs, that's the first step toward Germany's deindustrialization."

Electricity prices in Germany have been increasing since as early as fall 2021, with the spike initially due to rising demand amid global coronavirus lockdowns. Since the start of the Russia-Ukraine war in February last year, shortages of natural gas became a particular factor driving electricity prices up.

Wholesale electricity prices have multiplied in recent years, with numerous daily all-time high prices recorded last year. In 2021, the average wholesale electricity price was €96.85 ($103.20) per megawatt hour (MWh), up from €30.47 in 2020, according to the German Federal Network Agency.

According to comparison portal globalpetrolprices, Germany had, as of June 2022, among the highest electricity prices in the world at $0.52 per kilowatt hour (kWh). Only in Denmark was the per-kWh price greater, at $0.529.