German gas levy may never take effect as government struggles to lower energy prices

The planned gas levy designed to support Germany’s struggling gas importers could be undone before it even takes effect, energy policy newsletter Tagesspiegel Background reports. After finance minister Christian Lindner from the pro-business Free Democrats (FDP) criticised the controversial policy, which customers were due to start paying from next month, coalition partners Green Party and Social Democrats (SPD) have signaled the levy proposed by Green economy minister Robert Habeck could be scrapped. However, they have called on the finance minister to propose an alternative solution. Lindner had criticised the levy as a burden on gas customers already struggling with high energy bills, saying “we have a gas levy that increases the price. But we need a gas price brake that lowers it.” Green Party co-leader Ricarda Lang said an alternative would be to assist gas importers with state aid from the budget, which only treasurer Lindner can authorise. “The finance minister has to deliver something now and provide means to stabilise gas companies and also lower energy prices,” she argued. SPD co-leader Lars Klingbeil said abolishing the levy would send “the right signal” to citizens, adding that economy minister Habeck should propose a different solution.

Habeck himself said last week that it was unclear whether the levy could benefit Germany’s most important gas supplier, Uniper. The company is in the process of being nationalised, meaning the levy could amount to irregular state aid. This possible challenge would have to be examined from a legal viewpoint in the coming weeks, the minister said. In a separate press statement, Habeck said “we agree that companies and citizens need cost relief,” adding that “gas prices need to go down.” Meanwhile, an external commission tasked by the government with presenting solutions to the energy crisis could propose a solution that allocates a fixed amount of gas at capped prices and lets high market prices prevail for any additional gas consumption. The proposal is endorsed by the Greens and the SPD, Tagesspiegel Background reports.