Germany to Abolish Gas Storage Tariff by 2025, Easing Neighbors' Burden

Germany plans to eliminate the gas storage tariff by January 1, 2025, in response to complaints from neighboring countries like Austria and the Czech Republic. This tariff was imposed during the 2022 energy crisis to recoup costs from buying non-Russian gas. The change aims to lower gas transit costs and aid in reducing dependency on Russian fuel.

Reuters | Updated: 30-05-2024 15:38 IST | Created: 30-05-2024 15:38 IST
Germany to Abolish Gas Storage Tariff by 2025, Easing Neighbors' Burden
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Germany plans to abolish next year a gas storage tariff it charges neighbours for buying gas from its reserves, an economy ministry official said on Thursday, following complaints from the neighbouring countries. The levy is a legacy of the energy crisis that peaked in 2022 after Russia slashed gas supplies to Europe. It places an extra fee on fuel taken from Germany's gas stores to try to recoup the billions of euros it spent buying non-Russian gas at sky-high prices to avoid fuel shortages.

Austria, the Czech Republic, Hungary and Slovakia have said the levy hurts their efforts to shun Russian gas by making it more expensive to buy non-Russian fuel delivered via Germany. They have urged the European Commission to resolve the issue. Berlin has agreed with the Commission to abolish the levy but this won't happen before next year, energy state secretary Sven Giegold said on the sidelines of a meeting of European Union energy ministers in Brussels.

"Since this requires a legal change, the earliest possible date is January 1, 2025," he said, adding that scrapping the levy would significantly reduce the costs of gas transit through Germany and help neighbours wean themselves off Russian gas. The Commission has raised doubts about the legality of the levy as EU single market rules forbid tariffs on trade between member countries.

"It was never our intention to hamper the diversification with this levy away from Russian gas. Quite to the contrary," Giegold said, adding a planned increase in the levy in July would still come into force and would be mainly paid by German customers. "The gas storage system will continue to exist and will only be abolished on the interconnectors (with neighbours). Because the financing problem continues," he added.

Austrian energy minister Leonore Gewessler welcomed the German announcement. "I am very pleased that our intense negotiations and the attention we raised to this issue has now led to good results," Gewessler said on the sidelines of the Brussels meeting.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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