Greener pastures
January 18, 2012
Unstable electricity supply and insufficient access to crucial commodities in Germany, have replaced high labor costs as German industry's main concern for the future, a study by the German Industry and Commerce Association (DIHK), found.
The survey was carried out among the country's manufacturing industry, which is considered the backbone of the German economy.
One in five industrial enterprises, it said, had already moved parts of its manufacturing activities abroad, or was planning to do so "if conditions in Germany deteriorated further."
"It's alarming that German industry sees energy and commodities supply as competitive factors that other countries can provide better than Germany," said Hans Heinrich Driftmann, the head of the DIHK, Tuesday in Berlin.
Scarce resources
German industry imports raw materials worth 40 billion euros ($51 billion) annually. The study said that 50 percent of the companies surveyed saw future supplies as being critical - which meant that the number of "concerned business leaders had almost doubled" in comparison to a similar study conducted last year.
Driftmann said that global demand for such commodities would increase steeply in the coming years, forcing Germany into "a growing dependency" on a few minerals-rich countries.
"Since our companies cannot do without raw materials, they have to do everything to guarantee a steady supply, including considering a move to the countries which have them," he said.
Driftmann called on the German government to do more to ensure that crucial supply lines remained open. He mentioned so-called rare earth minerals, as an example, which were "increasingly in short supply," as China had reduced its output in recent months.
China is the world's main supplier of such scarce minerals. It has cut exports in efforts to guarantee supplies for its own industry and to keep market prices artificially high.
Power shortages feared
Another sector of concern for Germany industry was domestic electricity supply, the study said.
Fifty-eight percent of the companies surveyed said they feared power outages as a result of the government decision last year to put an end to nuclear power in favor of increasing the production of renewable energy.
Driftmann called for more "professionalism and efficiency" on the part of the government in engineering the switch.
"Industry can in no way afford any blackouts in the supply of electricity," he warned.
Tasks to be tackled immediately, he said, were the speedy establishment of smart distribution grids to cope with unstable wind and solar power, and more conventional power plants to manage peaks in electricity demand.
The DIHK president also urged the government to work towards greater acceptance among Germans for the financial and environmental consequences of the country's new energy policy.
Author: Uwe Hessler (dpa, dapd)
Editor: Nancy Isenson