HeidelbergCement initiates legal action

HeidelbergCement has taken legal steps against the German laws on emissions trading. These laws place a completely unreasonable burden on the cement industry in Germany. The Group would like to bring about a decision by the German Federal Constitutional Court (Bundesverfassungsgericht) regarding the constitutionality of the Emissions Trading Act this year, ie before the commencement of the first trading period, if possible.

 To this end, HeidelbergCement has instituted legal proceedings with the competent Administrative Courts (Verwaltungsgerichte) for locations in Baden-Württemberg and Bavaria. The Group refers to its operating licences, which were granted for an indefinite period and which allow the CO2 emissions necessary for its operation. According to the legislation previously in force, it is not possible to withdraw or shorten the duration of these licences. However, the Greenhouse Gases Emissions Trading Act (Treibhausgas-Emissionshandelsgesetz or TEHG) states that the emissions allowances are to be withdrawn from the plant operators, with no transitional period or compensation, so that the Federal Environmental Office (Umweltbundesamt) can redistribute them based on the allocation plans issued by the Federal Government. HeidelbergCement would be permanently committed to the low production levels of the 2000-2002 reference period and thus lose 40-50 per cent of its licensed plant capacity with corresponding long-term job effects.

Hans Bauer, Chairman of the Managing Board of HeidelbergCement and Chairman of the Association of the German Cement Industry (BDZ), says that HeidelbergCement fulfils the demanding Group and industry targets for the reduction of CO2 emissions: "The legal action is aimed at the excessively burdensome implementation of this legislation in Germany, which is unacceptable under the rule of law. The energy and capital-intensive cement industry is up against tough international competition and relies on a comparable economic environment. HeidelbergCement welcomes emissions trading. However, with the Federal Government re-equipping and re-arming this market-economy instrument to make it the Trojan horse of planned-economy production control, there is an imminent danger of cement production moving abroad. This makes no sense for either the economy or the climate."

Bauer asks the Federal Government and the EU Commission to postpone the commencement of emissions trading for a year, in view of the need for clarification of the constitutional position and the associated risks for the continued existence of the trading system, but also in view of the host of issues yet to be clarified.