Germany Exempts Gas Levy for Transit Countries Amid Diversification Efforts

Germany's parliament has agreed to remove a domestic gas levy for countries transiting gas. The decision, effective January 2025, was influenced by Austria, the Czech Republic, and Slovakia, who argued the fee inhibited their shift away from Russian gas supplies. This change aligns with the end of Russian gas flows via Ukraine.

Germany's parliament successfully passed a bill on Friday to exempt countries transporting gas through its territory from a domestic gas levy, a significant decision welcomed by its eastern neighbors. These countries contended that the fee prohibited their diversification efforts away from Russian gas supplies.

Initially agreed upon in May after considerable lobbying by Austria, the Czech Republic, and Slovakia, the decision to scrap the tariff arises from the levy imposed by Trading Hub Europe (THE) since 2022. The original purpose was to recuperate billions of euros spent by Germany in filling its gas storage following Russia's invasion of Ukraine.

The new legislative change, effective from January 1, 2025, will exempt transit gas buyers from the levy, while domestic consumers continue to pay. This waiver coincides with the anticipated cessation of Russian gas flows through Ukraine by the end of December. Austria remains heavily dependent on Russian gas, yet its primary importer has terminated its contract with Gazprom.

(With inputs from agencies.)