As in previous years, we would like to inform you in this blog post about changes announced for the new year 2024, which may have a direct or indirect impact on your work in purchasing and the supply chain.

Supply Chain Due Diligence Act (LkSG)

The German law on corporate due diligence obligations in supply chains came into force at the beginning of 2023. It defines the due diligence obligations for companies with regard to human rights and environmental issues in their own ranks as well as for the direct and indirect supply chain and obliges them to minimize and eliminate risks and violations and to report on these efforts.

At the end of 2023, the German government had discussed possible simplifications within the reporting obligation or a postponement of the deadline for submitting the reports. At the time this blog post was written, the first reports for 2023 must be submitted by the deadline of 1 June 2024, according to the BAFA website.

While the law initially applied to companies with 3,000 employees or more, this threshold will be lowered to 1,000 employees from 2024. However, even smaller companies may be affected if their customers are subject to the law and in turn pass on the due diligence obligations to their supply chain.

Carbon Border Adjustment Mechanism (CBAM)

Although the topic of CBAM has been active since October 2023, we would also like to mention it here, as a large proportion of German companies are affected and at the same time many do not yet have it on their agenda.

This involves the pricing of CO₂ emissions by means of the EU Emissions Trading Scheme (EU ETS) as a central climate protection instrument in the European Union. To prevent the migration of companies from CO₂-intensive industries to other EU countries, emissions-intensive imports from third countries are made more expensive by means of a CO₂ border tax on the European price level. The direct emissions of greenhouse gases during the manufacturing process of the products concerned are priced.

Since 1 October 2023, companies have had to calculate and document the direct and indirect emissions generated in the production process of imported goods and report on them on a quarterly basis, for the first time by 31 January 2024 at the latest. The report contains data on the import volume of direct and indirect CO₂ emissions emitted in other EU countries and the possible CO₂ price paid in the country of origin.

From 2026, EU importers will then be obliged to purchase certificates upon import that correspond to the CO2 price that would have been paid if the goods had been produced in accordance with the EU rules for pricing CO2 emissions.

Corporate Sustainability Reporting Directive (CSRD)

The CSRD came into force at EU level on 5 January 2023 and is the further development of the Non-Financial Reporting Directive (NFRD). It specifies which companies are obliged to report on sustainability – with the expansion of the reporting obligation, the number of companies subject to reporting requirements will gradually increase from 11,600 to 49,000 over the next few years, according to estimates. At the same time, it sets out requirements for the content of reporting, known as the European Sustainability Reporting Standards (ESRS).

For the first time, companies subject to reporting requirements must report for the year 2024 from January 2025. This means that data for this report must be collected for the first time in the new year for large companies of public interest.

 CO₂ tax

The German CO₂ emissions trading system (EHS) was launched in 2021 as part of the German government’s 2030 climate protection program. Companies are obliged to purchase certificates for pollution rights and pass these costs on to their customers in the form of rising prices.

After the German government suspended the planned increase for 2023 due to the rise in energy costs, the tax will now rise more than originally expected to €45 per ton on 1 January 2024 as a result of the latest budget debates. As a result, the ADAC expects the price of a liter of petrol to rise by around 4.3 cents and a liter of diesel by around 4.7 cents. A further increase to 55 euros per ton has been announced for 2025.

The price under the EU Emissions Trading Scheme (EU-ETS) is also set to increase in 2024. The EU set the course for a corresponding reform in the summer of 2023 in order to achieve the European climate protection target of reducing emissions by at least 55 per cent by 2030 compared to 1990.

Price increases for electricity and gas

Due to the cancellation of a planned billion-euro subsidy – also a measure in the revised 2024 budget – grid fees will double at the turn of the year. As the operators of the German electricity transmission grids announced in mid-December, the costs will increase from the current 3.12 cents per kilowatt hour to 6.43 cents.

In order to mitigate inflation in the energy sector, the German government had adopted the electricity and gas price brake for households and businesses for 2023, which defined a price cap for a large proportion of consumption. This price brake will no longer apply in the new year.

Rising business travel expenses

Business trips will also potentially become more expensive in 2024. Although the initially announced national paraffin tax will not be introduced after all, air traffic taxes are to be increased instead. This means we can expect prices for flight tickets to rise. At the same time, Deutsche Bahn had already raised prices for both tickets and rail cards with the timetable change in December.

Minimum wage

The general nationwide minimum wage will rise by 41 cents to 12.41 euros gross per hour from 1 January. A further increase is planned for January 2025 to 12.82 euros.

In addition, increases in the current minimum wage are planned for the coming year in individual sectors. For example, the industry minimum wage for the electrical trade will rise to 13.95 euros in January and to 13.50 euros per hour for temporary work. Increases have also been announced for wages in the roofing and building cleaning trades at the turn of the year. Painters and varnishers will follow suit with a wage increase in April, scaffolders in October. Employees in the care of the elderly will receive more money from 1 May: the minimum wage for care professionals will rise to 19.50 euros, for qualified care assistants to 16.50 euros and for care assistants to 15.50 euros.

Toll obligation for small vans

From 1 July, the toll obligation, which previously only applied from 7.5 tons, will also be extended to smaller vans weighing more than 3.5 tons. Transport costs are expected to rise.

We monitor developments with interest and always proactively develop solutions for our customers. We at ADCONIA and Adconterra offer an existing toolbox and sound processing approaches for many of the challenges mentioned, whether they relate to cost management, sustainability or digitalization.

In 2024, we look forward to exciting projects, good discussions and the joint creation of added value for your company. Please feel free to contact us. With this in mind, we would like to take this opportunity to wish you a happy and successful new year.