In a move aimed at reducing energy costs for both households and businesses, Germany’s conservatives and Social Democrats have reached an agreement to eliminate the country’s gas storage levy, Bloomberg reports.
The decision to abolish the levy was outlined in a working paper prepared earlier this week as part of ongoing discussions to form a new coalition government.
The gas storage levy, currently paid by manufacturers and households, was introduced following the energy crisis to ensure supply security by covering the costs incurred by operators when refilling gas storage facilities.
Earlier this month, Germany’s influential BDI lobby group urged the government to either exempt industry from the fee or find alternative methods to provide greater flexibility regarding gas stockpiling targets. The group argued that high energy costs have been a significant contributing factor to a persistent downturn in the manufacturing sector.
The parties involved in the coalition negotiations stated that they would “introduce appropriate instruments to ensure secure and more cost-effective gas storage filling” to support “long-term, diversified, low-cost gas supply contracts with international gas suppliers.” The precise details of these instruments were not specified.
Germany previously applied the charge at cross-border interconnection points, a practice that drew criticism from neighboring countries for making it more expensive to obtain fuel. However, this border surcharge was eliminated late last year.
The incoming government has expressed its commitment to lowering energy bills for companies and consumers by at least 5 cents per kilowatt-hour. In the working paper, the parties also outlined plans to reduce power taxes to a European minimum and decrease surcharges and grid fees.
