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    EU Commission looks into Germany's natural gas levy


Export tariff could distort EU market, breach competition rules.

by: Reuters

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Complimentary, Natural Gas & LNG News, Europe, Security of Supply, Political, Tax Legislation, Regulation, News By Country, EU, Germany

EU Commission looks into Germany's natural gas levy

BRUSSELS, Jan 26 (Reuters) - The European Commission has asked the EU's energy regulator ACER to examine whether a tariff Germany added to its natural gas exports distorts the bloc's single market in a possible breach of competition rules, three sources close to the matter said.

The tariff is a legacy of the European energy crisis that peaked in 2022 after Moscow cut gas flows to Europe following its invasion of Ukraine and an undersea explosion shut the Nord Stream pipeline from Russia to Germany - the route for 15% of Europe's gas imports.


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That year, the Commission issued EU-wide gas storage filling targets to shore up supplies ahead of winter 2022-2023. Berlin asked its marketing hub, Trading Hub Europe (THE) to fill its stocks but a surge in gas prices left the government with a bill of nearly 10 billion euro ($10.84 billion).

THE did not immediately repond to requests for comment and Germany's economy ministry said it had no immediate comment when contacted by Reuters.

To try to recoup its losses from other EU countries buying its gas, Germany introduced what it termed a gas "neutrality charge". As of Dec. 2023, Germany still needed to recover 8.5 billion euros.

The energy department of the European Commission has asked ACER to look into the matter and its findings are expected to be presented to the Commission within the coming weeks, the sources said.

"We are aware of the German neutrality charge and the concerns expressed by various parties. The Commission’s energy department (DG ENER) is in touch with relevant national authorities on this matter, as well as the Agency for the Cooperation of Energy Regulators," an EU official said.

A spokesperson for ACER told Reuters it was in discussion with national regulators.

"Namely, whether more coordinated approaches between member states could usefully be pursued here in order to meet, on the one hand, wishes to recover costs, whilst on the other hand, not risking to fragment our integrated energy markets," it said.


Before Germany introduced the levy, ACER and the Council of European Energy Regulators (CEER) said that EU countries could not impose extra cross-border charges to recover costs.

"Financial compensation should be collected in a non-discriminatory way and not from crossborder transmission tariffs," ACER and CEER wrote in April 2022.

"The cost of national storage obligations should indeed be covered by consumers or citizens from the same MS (member state)."

Any sympathy for Germany, Europe's largest economy, which has suffered a major hit from its over-reliance on Russian gas, has been wearing thin among its fellow EU member states.

Italy and Austria have in recent weeks openly complained about Germany's unilateral tariff and said they may follow Berlin's lead with their own levies.

"DG ENER has been in touch with the Italian regulator," the EU official added.

"We stressed that tariffs have to comply with the EU legislative framework. The protection of the internal market and the avoidance of market fragmentation is very important for the Commission."

In December, Italy's energy regulator ARERA said it was proposing a "neutrality charge" pending consultations.

Brussels-based trade body, the European Federation of Energy Traders (EFET), has criticised the German levy and Italy's proposal for endangering the bloc's energy security by reducing market liquidity that can in turn lead to price volatility among other distortions.

Natural gas markets became dysfunctional in 2022, leading to extreme margin calls that potentially threatened the stability of financial markets.

"We already witness other Member States considering the implementation of similar charges on interconnection points," EFET said in a statement this week.

"Such a chain reaction would only threaten supply security across Europe and fragment the single market."

($1 = 0.9228 euros)

(Reporting by Julia Payne, additional reporting by Christoph Steitz in Frankfurt and Markus Wacket in Berlin; editing by Barbara Lewis)