The German government has decided to stop applying the tax on the storage of natural gas leaving the German grid at border interconnection points from 2025, in order to promote greater integration between European energy markets.
Elimination of taxes on gas storage
“Germany never intended to hinder market integration with this tax or to affect countries’ efforts to become independent from Russia,” said Sven Giegold, the permanent secretary of the German Ministry of Economics and Climate. In addition, the country continues to support the diversification of gas supply in Europe by expanding its liquefied natural gas (LNG) import infrastructure, which also benefits its neighbors.
The tax had been introduced to recover the cost of purchasing 50 TWh of gas, on the spot market in the summer of 2022. The objective was to allow the filling of storage sites, before winter. However, the drop in gas prices resulted in only one-third of the amount spent being recovered, through gas sales and gas sales The loss of around US$6.8 billion, affecting the entire German grid.
Although the gas storage neutrality charge will remain in place for domestic consumers, on the grounds of the “public good it will continue to require funding,” Giegold did not elaborate on any modifications or future tax methodologies.
Established gas taxes
Recently, the announced increase of the tax to €2.50/MWh for the second half of this year is still a legal requirement under current law. The minister indicated that the change, scheduled for early 2025, represents an exceptionally rapid transformation in democratic legislation.
Germany’s neighbors in Central and Eastern Europe, such as Austria, the Czech Republic, Hungary and Slovakia, had previously expressed concern about the negative impacts of the tax on their efforts to diversify their gas sources away from Russia and had asked the European Commission to intervene.
Energy Commissioner Kadri Simson, who had previously criticized the tax for “putting energy solidarity at risk,” said she had sent several letters to German Economics and Climate Minister Robert Habeck on the issue and hoped that Germany would abolish the tax on transit flows.
Follow us on social networks and don’t miss any of our publications!
YouTube LinkedIn Facebook Instagram X
Source: Argus Media
Photo: Shutterstock
Loading...
