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ENERGY

German regulator suspends Nord Stream 2 approval process

Germany's energy regulator said Tuesday it was temporarily halting the approval process for Russia's controversial Nord Stream 2 gas pipeline, saying the operating company first needs to become compliant with German law.

A sign reads
A sign reads "Info Point Nord Stream 2 Committed Reliable Safe" above a map at the natural gas receiving station in Lubmin, northern Germany. Photo: picture alliance/dpa | Stefan Sauer

The move is the latest setback for the 10-billion-euro project ($12 billion), which has been dogged by delays and become a geopolitical hot potato.

The Baltic Sea pipeline is set to double Russian gas supplies to Germany, which the EU’s top economy says is needed to help it transition away from coal and nuclear energy.

But opponents say the recently completed pipeline will increase Europe’s energy reliance on Russia.

Crucially, the pipeline also bypasses Ukraine’s gas infrastructure, depriving the country of much-needed transit fees.

The dispute comes as Europe, which receives a third of its gas from Russia, is battling surging energy prices just as the continent heads into the colder winter season.

German consumers have been warned that prices for energy are at their highest levels – and will increase further. 

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Germany’s energy regulator said in a statement that “it would only be possible to certify an operator of the Nord Stream 2 pipeline if that operator was organised in a legal form under German law.”

READ ALSO: Germany set to finish controversial Russian pipeline despite US protest

The certification procedure “will remain suspended until the main assets and human resources” have been transferred from the Nord Stream 2 parent company to its German subsidiary, that will own and operate the German part of the pipeline, it added.

Critics have accused Moscow of intentionally limiting gas supplies to Europe and driving up prices in an effort to hasten the launch of Nord Stream 2, a claim Russia denies.

Russian gas giant Gazprom said last week that it had begun implementing a plan to restock European gas storage facilities.

Germany’s energy regulator has four months, until January 2022, to give its green light for Nord Stream 2.

After that, the European Commission still needs to give its recommendation.

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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.

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