EnergyWatch

Germany to reassess gas levy after outcry over energy profits

The republic's energy minister says he will explore options to block some energy companies from reaping unwarranted profits off a new consumer tax meant to help mitigate business losses due to soaring prices of natural gas.

Photo: Lisi Niesner/Reuters/Ritzau Scanpix

German Economy Minister Robert Habeck said he’ll look into ways of preventing some importers from benefiting from a new levy on consumers to compensate for surging gas prices if they don’t genuinely need the assistance.

The government is imposing the levy to help fund aid for suppliers forced to pay higher prices due to Russia squeezing gas deliveries via the Nord Stream pipeline. If any of Germany’s importers went bust, it could trigger wider disruption in energy deliveries to Europe’s biggest economy.

However, the move has prompted a political backlash, with some members of Chancellor Olaf Scholz’s ruling coalition urging a rethink. There have also been widespread calls for an additional tax on energy companies whose profits have soared due to the crisis, though Finance Minister Christian Lindner has ruled out such a move.

Habeck said late Thursday that it’s “certainly not morally correct” that companies that have benefited from energy inflation are also asking for government handouts. Twelve companies initially filed applications for about EUR 34 billion in assistance, according to Trading Hub Europe, Germany’s gas market manager.

“All I’m saying is, let’s look at that again,” Habeck said, according to excerpts from a speech in Muenster late Thursday published by Die Welt newspaper.

“However, there is a relatively high hurdle,” he cautioned. “If we start to play games and that brings lawsuits -- and there will definitely be lawsuits in one direction or another -- and the levy is scrapped then we will still have the same problem: some companies and citizens will experience a collapse in gas supply.”

Due to take effect from Oct. 1 and expire at the end of March 2024, the gas levy was set this month at 2.4 euro cents per kWh.

Utility Uniper SE and the company previously known as Gazprom Germania GmbH -- both the recipients of government bailouts -- are seeking 92% of the relief, a person familiar with the situation said this week.

Utility RWE AG, which filed an application for assistance, has said it will waive the money as it is not heavily dependent on Russian gas.

“I’m just trying to be fair, but above all I have an obligation to maintain security of supply in Germany -- for better or worse,” Habeck said, according to the Welt transcript. “We will see if we can find a legally secure way of stopping these companies making improper use” of the levy, he added.

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