Changes in the environmental fund are the key to preserving the highly energy-intensive industry in Slovakia
January 20, 2023
Changes in the Environmental Fund are the key to preserving the highly energy-intensive industry in Slovakia. This is stated by the Association of Industrial Unions and Transport. She therefore appeals for the adoption of the amendment to the law on trading with emission quotas from deputy Jaroslav Karahuta (We are a family). The proposal brings a fairer redistribution of revenues from auctions of quotas, increases the income of the environmental fund from the sale of emission permits from 30% to 70%, and at the same time increases the share intended for compensation to energy-intensive enterprises from 25% to 35%.
The European Union has created a system of emission allowances as additional fees above the price of electricity, which are collected in a member state of the European Union in the so-called Environmental fund and should be used for green goals and compensation for highly energy-intensive production. Individual states determine the amount of compensation themselves. “If in 2021 the compensation for 2020 was paid in France in the amount of 37.4% from the sale of emission allowances and in us it was 4.5%, we cannot talk about the same business conditions,” the association states.
According to her, highly energy-intensive productions thus become unsustainable, which was also the case with Slovac and OFZ. At current energy prices, these companies are the most threatened, because their electricity costs are many times higher than other producers. Electricity represents 40% to 60% of their production costs. If the costs of a normal industrial enterprise increase by a million, the costs of a highly energy-intensive industry will increase by a billion. This is a huge burden for these enterprises, which can lead to a complete shutdown of production.
“In order to prevent this, highly energy-intensive businesses must purchase electricity at a time when it has favorable prices. To be able to do this, they need a predictable system of payments to and contributions from the Environmental Fund. We lack that in Slovakia,” the association points out. The revenues of the environmental fund grow every year, until in 2016 they were 65 million. euros, in 2020 they grew to 400 million. euro However, the amount of compensation was reduced from 10 mil. euros in 2016, to 4 million. euros in 2020. The Union allows selected companies to compensate indirect costs of CO2 up to 25% of revenues from auctions of emission quotas.
The Trade Union and Transport Association represents more than 70% of the domestic manufacturing industry, 1,500 companies and 180,000 employees. Its members are the Association of the Automotive Industry of the Slovak Republic, the Association of the Engineering Industry of the Slovak Republic, the Association of the Electrotechnical Industry of the Slovak Republic, the Association of Metallurgy, Mining Industry and Geology of the Slovak Republic, the Slovak Electromechanical Association, the Association of Construction Entrepreneurs of Slovakia, the Slovak Trade Union, the Association of Logistics and Shipping of the Slovak Republic, the Association of Railway Carriers of Slovakia – AROS, Association of Bus Transport, Union of Váharov SR and Slovak Biogas Association.