German companies considering relocation due to high energy prices

A survey by the German Chambers of Commerce and Industry (DIHK) found that an increasing number of companies in Germany are considering reducing production or relocating abroad due to high energy costs. Currently, four out of ten industrial companies are contemplating this, with over half of companies with more than 500 employees considering the same.

The DIHK stated that the trust of German businesses in energy policy has been severely damaged, as the government has failed to provide a reliable and affordable energy supply perspective, particularly for the industry. The DIHK has been conducting annual surveys since 2012, assessing the impact of the energy transition on the competitiveness of German companies.

This year, the overall sentiment across all sectors is at -20, the second-worst value in the history of the Energy Transition Barometer. The previous year was even lower at -27.

Companies cite bureaucracy, long approval processes, and high energy prices as the main obstacles, with 61% viewing bureaucracy and 48% viewing lengthy approval processes as hindrances. Additionally, companies are increasingly turning to direct supply contracts for wind energy and access to hydrogen.

The rising CO2 price in Germany leads to higher energy costs compared to other countries. Although energy prices have temporarily increased due to the Russian attack on Ukraine, they have since declined but remain high compared to international levels.