Germany’s economy ministry is reportedly set to reject a European Commission proposal to impose a surcharge on industrial on-site power.

In a paper seen by the Reuters news service, the ministry said the proposed charge could cost the nation’s industrial sector €760 million ($845 million) annually – even if it was only partly imposed. The paper is reportedly set to be delivered to the Commission in the next few days.  

Revenues from the surcharge would help pay for Germany’s Energiewende, the transition to a low-carbon, renewables-based economy. The current EEG surcharge does just that, but a number of companies working in energy-intensive industries have so far been exempted from paying.

However, the Commission’s approval for this exemption runs out in 2017. Under the proposed plan, existing on-site power plants would have to pay at least 20% of the surcharge by 2019, while newly built plants would have to pay the full charge.

In the paper, the ministry reportedly argued that revoking the exemption would actually hurt the energy transition as well as industry, as the bulk of Germany’s industrial on-site installations are combined heat and power (CHP) plants which are more efficient than conventional plants due to their use of recovered heat for industrial processes.

On-site power accounts for around one-quarter of the energy consumed by Germany’s industrial sector.