German opposition leader Friedrich Merz has said his party would agree to the law which abolishes the German gas storage levy on cross-border flows, and the bill is now scheduled to be debated in parliament on 20 December.
The removal of the gas storage levy for European neighbours is "a law that we can support" before the next election, the conservative CDU party leader Merz said in Berlin yesterday.
Merz had previously said he would only be open to discussions about potential last-minute legal projects after the vote of no confidence, which chancellor Olaf Scholz lost yesterday. Elections are now expected to be held in late February, putting all parties in campaign mode.
The German government collapse in early November put the storage levy change at risk of not being passed before the end of this year, as the government has lost its working majority in parliament.
THE originally introduced the levy in October 2022 to recoup the cost of purchasing 50TWh of gas in summer 2022 on the spot market without hedging it forward. It bought this gas at an average price of about €175/MWh, when spot prices spiked following the halt to Russian flows.
Germany announced in May that it would scrap the charge at border points, following complaints from its eastern neighbours that the levy discourages transit through Germany and complicates efforts to diversify away from Russian gas.
Timing remains tight for levy to be passed
The law is scheduled to be debated in parliament on the morning of 20 December and will have to be approved by the upper house of parliament — the Bundesrat — that same day if it is to enter into force on 1 January.
The bill already had its first reading in September. The second and third readings of a bill can be compressed into one if no amendments to the law are adopted during the session.
During the comments stage of the storage levy bill in the Bundesrat, the house proposed a second change to the energy industry act concerning regulatory approval for hydrogen electrolysers. Merz said this was largely connected with wind power and planning on a state level in North Rhine-Westphalia. He said he hoped it was possible to find a consensus, and stressed this was part of the talks this week. If the current draft has to be amended, the second and third reading could not be completed in one session.
And the Bundesrat has only one more session before the new year, also on 20 December. The Bundesrat confirmed to Argus today it had received a request to shorten the time-limits on the relevant bill. This request will be decided tomorrow afternoon, and if approved, the Bundesrat could put any passed bills onto the agenda on 20 December, the Bundesrat told Argus.
Politicians have told Argus the law could also be abolished retroactively after 1 January. And German market area manager THE told Argus late last week that the first payments for the new levy are only due around the end of March, leaving an almost three-month leeway for the law change to take effect. But traders have emphasised that without a strong signal the flow-based charge will go, spot price premiums in neighbouring markets will have to be large enough to offset the levy in order to attract imports.
Austria still threatens legal steps
Austrian energy and climate minister Leonore Gewessler yesterday reiterated that Austria could reactivate its lawsuit against Germany as a "measure of last resort".
Gewessler will instruct the Austrian civil service to investigate and prepare a lawsuit at the European Court of Justice but said she remains confident she will not have to use this last resort. The matter is of utmost importance to Austria's energy security and diversification on the path away from Russian gas, Gewessler said. THE assuming no revenues from cross-border flows in its most recent levy setting was "a positive signal", Gewessler said. THE set the levy at €2.99/MWh for the first six months of 2025.
Austrian regulator E-Control had previously told Argus it would "take all necessary steps" at an EU level if it looks like a law to abolish Germany's storage levy on gas exiting the country will not be passed in time.
Czech deputy minister for industry and trade Stepan Hofman said yesterday "Germany confirmed to us it is doing everything in its parliament to approve the abolition of the tax as of January 1 2025, this week."
