Euractiv reported that at a meeting on May 30, the German government announced that it would abolish the tax on gas exports from its reserves to neighboring countries in the European Union (EU).
In the summer of 2022, when Russia stopped supplying gas to Germany, the German government allowed the purchase of gas at high prices (5 times the current gas price) from other sources to fill its reserves before winter.
As gas prices have fallen, market operator Trading Hub Europe (THE) has collected surcharges for gas exports from reserves to cover costs. Also in 2022, Germany passed a law taxing all gas leaving the country to cover a budget deficit of nearly 10 billion euros. From July 1, 2024, the tax rate will increase by 34% to 2.5 euros/MWh.
neighbors see the tax rate - which increases wholesale gas prices by nearly 10% - as a barrier to leaving Russian gas, which is sold at a cheaper price. Austria and the Czech Republic - two landlocked countries that depend on imported gas through Germany - are campaigning against the plan.
The European Commission also believes that this measure may be illegal, and there is a basis to consider this a violation of competition law and general market rules in the EU. Unless Germany takes action to remedy the violation and remove or reduce the tax to the point of not disrupting the general market, otherwise it will be inevitable to be sued in court.
Participating in a meeting of EU Energy Ministers in Brussels ( Belgian) on May 30, German Foreign Minister Sven Giegold announced that from January 1, 2025, the above tax will be abolished.
This will support the integration of European energy markets, he explained, adding that the purpose of the plan was never to make it difficult for countries to abandon Russian gas.
Mr. Giegold said that Berlin has gone from being determined to defend the tax rate for many months to abolishing it almost overnight because they listen to neighboring countries. Austria, the Czech Republic, Hungary and Slovakia have raised this issue many times.
Except for any legal changes, if the full cost of maintaining gas reserves at a high level is not yet likely to be borne by German consumers, rather than consumers in other EU countries.
Before this tax is abolished, the tax will still increase by 34% to 2.5 euros/MWh from July 1, 2024 according to the 6-month plan.
For Eastern Europe, early 2025 is a key time as the Russian gas transit agreement through Ukraine expires - which could disrupt gas transit to Austria, Hungary, Slovakia and the Czech Republic.
With the lifting of gas and gas transit tariffs imported from Western Europe via Germany, the cost will be similar to that of gas from Russia - making it easier for countries to leave Russian gas.
