Genan introduces energy surcharge

– Circular economy also requires energy

Like so many other companies around the world, Genan has in 2021 been impacted by soaring energy prices. To honour agreements made, we absorbed these costs in 2021; but we will unfortunately not be able to continue down this road in 2022.

If the skyrocketing electricity prices were to be reflected in our annual price adjustment, we would have to implement considerable price increases, the way things look now. Price adjustments which would be out of proportion with cost level, if electricity costs were to normalise. Such situation would in our opinion not be justifiable to our customers. Yet, the problem is that we do not know when things will get back to normal.

For the sake of our customers, we have thus decided to keep energy costs separate from the calculation of our normal, annual price adjustment for 2022 – which will consequently include everything else but energy.

Instead, we will introduce a variable energy surcharge, which will in a most transparent way follow the specific energy index of the country in question, and which will be adjusted on a monthly basis. We hope in this way to create a higher degree of transparency and flexibility for our customers – and look forward to being able to remove the surcharge again, as soon as energy prices drop and stabilise.

Calculation of the Genan Energy Surcharge

When you deliver end-of-life tyres (ELT) to Genan for recycling, Genan will – until energy prices normalise and stabilise – charge an energy surcharge per tonne of ELT delivered. This energy surcharge shall be adjusted on a monthly basis – and is calculated as an average based on the spot prices of energy registered in the previous month in the country in question.

Below, you can see the development of the Genan energy surcharge over the past year.

Spot prices for energy for each of the European Genan plants