27.10.25 - The high cost burden caused by the current energy transition policy is not only leading to the relocation of energy-intensive industrial plants but also endangering companies broadly across Germany. This was underlined by a study conducted by Frontier Economics on behalf of the German Chamber of Commerce and Industry (DIHK). The supplementary study to the "New Ways for the Energy Transition" study presented in September examines how individual sectors are affected by the current design of the energy transition. Specifically, it addresses the question of how companies face increased costs, areas at risk of relocation, and strategies to mitigate these risks.

A key finding: The energy transition imposes a double burden on companies: directly through higher energy costs and additional expenditures for machinery and equipment. Indirect costs are further incurred due to preproducts, logistics services, personnel, and bureaucracy and administration. These hidden burdens are particularly high in the chemical and basic materials industries, the construction and real estate sectors, retail, and hospitality. Logistics businesses, service providers, and machinery manufacturers are also heavily affected. Collectively, this threatens the survival of companies in Germany.

One driving factor is the sharply rising network charges. To transport renewable electricity, the power grid needs extensive upgrading. The study therefore anticipates an increase in electricity network charges of around 63 percent for trade and commerce and nearly 50 percent for private households by 2045. Industrial plants must even reckon with cost increases of 70 percent or higher, while industrial large-scale consumers face nearly 130 percent. Meanwhile, the increasing electrification drives a significant decline in gas consumption, redistributing the costs of gas network infrastructure onto fewer shoulders. As a result, gas network charges for these consumers will noticeably rise: In the commercial sector, according to the Frontier analysis, they will rise from 1.6 ct/kWh in 2024 to 4.3 ct/kWh in 2040. In industry, they will nearly triple during the same period, from 0.6 to 1.7 ct/kWh.

"The energy transition not only increases energy prices but also leads to cost increases across the economy," explains Achim Dercks, Deputy Chief Executive Officer of DIHK. "This increases pressure even in less energy-intensive areas. Nearly all companies rely on affordable energy prices, as well as inexpensive preproducts, transportation options, and stable wages, to keep their products and services competitive. Continuing the current energy transition course heightens the threat of increasing value creation decline in Germany."

The study shows that sectors are particularly at risk where high exposure to direct and indirect energy costs meets strong international competition. This primarily affects the energy-intensive raw materials and chemical industry, but also other less energy-intensive sectors such as the food and beverage industry, consumer goods industry, and medium-sized sectors characterized by engineering and electrical engineering. In other sectors like construction, hospitality, or retail, while there is no risk of relocation, cost increases in these areas directly affect purchasing power and thus domestic demand, which also threatens the survival of companies.

"The current energy transition course risks not only energy-intensive industries but also the competitiveness of the entire German economy," says Dercks. "To protect Germany as a business location, a realignment of energy policy is needed. It must become simpler, more flexible, and more market-oriented." The main "New Ways for the Energy Transition" study proposes a comprehensive, cross-sector emissions trading scheme as a central instrument. With the model outlined in the study, energy transition costs could decrease by nearly one trillion euros by 2050.

To keep Germany competitive, adjustments also need to be made in other areas, explains Dercks: "Germany will continue not be a low-energy-cost country, as costs will keep rising in the coming years. Therefore, it is crucial to relieve companies in other areas – by accelerating planning and approval processes, ensuring reliable and practical regulation, faster expansion of modern infrastructures, promoting innovation, and securing skilled workers."
 

The complete study "New Ways for the Energy Transition ("Plan B") – Supplementary study on the endangerment of companies" can be downloaded on the Frontier Economics website (only available in German).