SHARE
COPY LINK

EUROPE

EU probes German electricity exemptions

The European Commission said Wednesday it was launching an investigation into possible state aid to large consumers of electricity in Germany.

EU probes German electricity exemptions
Photo: DPA

The probe will test whether exemptions from network charges Germany introduced in 2011 are in effect hidden subsidies, and if that is the case, whether they have distorted competition with companies in other EU nations, the Commission said.

The exemption was estimated to be worth some €300 million in 2012 when it was financed by a €19 surcharge on other electricity consumers.

The Commission said it had “received several complaints from consumer associations, energy companies and citizens alleging that this exemption constitutes unlawful and incompatible state aid.”

It said its preliminary view was that the €19 surcharge “may constitute a state resource and that the exemption seems to give the beneficiaries a selective advantage compared to their competitors” in other EU countries.

“This is likely to distort competition within the EU internal market,” it said in a statement, adding that it will examine carefully whether the exemptions are justified on common interest grounds and if so, whether this could outweigh the negative impact on competition.

The Commission said it will also examine whether the exemption was financed from state resources in 2011 before the surcharge was imposed.

The opening of the investigation does not in itself prejudge the outcome, it added, inviting German and other concerned parties to comment on the issue.

AFP/jcw

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

ENERGY

German government announces fresh relief package for high energy costs

With Russia's invasion in Ukraine exacerbating high energy and petrol prices, Germany is set to introduce a second relief package to limit the impact on consumers.

German government announces fresh relief package for high energy costs

The additional package of measures was announced by Economy and Climate Protection Minister Robert Habeck (Greens) on Sunday.

Speaking to DPA, Habeck said the wave of price increases throughout the energy sector were becoming increasingly difficult for households to bear.

“Extremely high heating costs, extremely high electricity prices, and extremely high fuel prices are putting a strain on households, and the lower the income, the more so,” he said. “The German government will therefore launch another relief package.”

The costs of heating and electricity have hit record highs in the past few months due to post-pandemic supply issues. 

This dramatic rise in prices has already prompted the government to introduce a range of measures to ease the burden on households, including abolishing the Renewable Energy Act (EEG) levy earlier than planned, offering grants to low-income households and increasing the commuter allowance. 

READ ALSO: EXPLAINED: What Germany’s relief package against rising prices means for you

But since Russia invaded neighbouring Ukraine on February 24th, the attack has been driving up energy prices further, Habeck explained.

He added that fears of supply shortages and speculation on the market were currently making the situation worse. 

How will the package work?

When defining the new relief measures, the Economics Ministry will use three criteria, Habeck revealed. 

Firstly, the measures must span all areas of the energy market, including heating costs, electricity and mobility. 

Heating is the area where households are under the most pressure. The ministry estimates that the gas bill for an average family in an unrenovated one-family house will rise by about €2,000 this year. 

Secondly, the package should include measures to help save energy, such as reducing car emissions or replacing gas heating systems.

Thirdly, market-based incentives should be used to ensure that people who use less energy also have lower costs. 

“The government will now put together the entire package quickly and constructively in a working process,” said Habeck.

Fuel subsidy

The three-point plan outlined by the Green Party politician are not the only relief proposals being considered by the government.

According to reports in German daily Bild, Finance Minister Christian Lindner (FPD) is allegedly considering introducing a state fuel subsidy for car drivers.

The amount of the subsidy – which hasn’t yet been defined – would be deducted from a driver’s bill when paying at the petrol station. 

The operator of the petrol station would then have to submit the receipts to the tax authorities later in order to claim the money back. 

Since the start of the war in Ukraine, fuel prices have risen dramatically in Germany: diesel has gone up by around 66 cents per litre, while a litre of E10 has gone up by around 45 cents.

READ ALSO: EXPLAINED: The everyday products getting more expensive in Germany

As well as support for consumers, the government is currently working on a credit assistance programme to assist German companies that have been hit hard by the EU sanctions against Russia.

As reported by Bild on Saturday, bridging aid is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

In addition, an extension of the shorter working hours (Kurzarbeit) scheme beyond June 30th is allegedly being examined, as well as a further increase in the commuter allowance.

SHOW COMMENTS