Germany wants to abolish levy for gas transit
Published: Thursday, May 30th 2024, 13:40
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Germany wants to abolish the controversial gas storage levy at border crossing points with neighboring countries. The German government has agreed on this, said State Secretary for Economic Affairs Sven Giegold at a meeting of EU energy ministers in Brussels on Thursday.
This will significantly reduce the cost of gas transit through Germany and support the joint efforts to enable neighboring countries to move away from Russian gas, it was said. The move could result in additional costs for consumers in Germany.
Introduced as a crisis instrument
The levy was introduced in autumn 2022 as a result of the Russian attack on Ukraine and the resulting energy crisis and reimburses the company Trading Hub Europe, which is responsible for organizing the German gas market, for costs incurred to ensure security of supply, such as for gas purchases. The levy not only affects companies and consumers in Germany, but also importers in neighboring countries that purchase gas via German pipelines.
As the abolition will require a legal amendment, the earliest possible date is the beginning of 2025, according to the information provided. It was never the intention to use the levy to hinder the integration of markets in Europe or even to disrupt independence from Russia, said Giegold. "It's quite the opposite. This levy was used to finance the filling of gas storage facilities, which has helped us to maintain a more independent and stable market in Europe."
Consequences for consumers remain open for the time being
The levy was last extended until April 2027. From July, the levy is set to rise from the current EUR 1.86 to EUR 2.50 per megawatt hour. According to calculations by the comparison portal Verivox, a household with an annual consumption of 20,000 kWh will pay around €60 gross per year for the gas storage levy from July 2024. The share of the gas storage levy in the total gas bill will then be around 2 percent.
The energy policy spokesman for the FDP parliamentary group, Michael Kruse, criticized the decision as premature. Before Economics Minister Robert Habeck makes unilateral promises to neighboring countries at the expense of German gas customers, all options for a fair distribution of the burden between German and foreign gas customers should be explored, he told the German Press Agency.
State Secretary Giegold said: "The costs will of course have to be distributed in accordance with the existing legislation, but that is also the subject of the legislative process." It can be assumed that the levy will continue to be charged - unlike for domestic exports: "The public good must continue to be financed."
Controversial in Europe
According to the Ministry of Economic Affairs, the responsible Trading Hub Europe calculates the new levy amount at the end of the year on the basis of current and expected gas consumption. The levy is controversial in the EU, especially in Central and Eastern European countries. They complain that the resulting increase in transit costs would hit the regions disproportionately hard and make access to gas imports from Western Europe more difficult.
As a result, some countries may be forced to rely more heavily on gas imports from Russia. This could increase their geopolitical dependencies and undermine efforts to diversify energy sources.
EU Energy Commissioner Kadri Simson had also pointed out that such measures by individual states could jeopardize the broader distribution of European gas imports. According to her own information, she has sent several letters to Berlin.
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