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ENERGY

Germany pledges to change gas levy over energy profits outrage

Germany's Economy and Climate Minister Robert Habeck has vowed to change the planned gas levy law to stop energy companies from boosting their profits with it.

Economy and Climate Minister Robert Habeck at a press conference on August 26th.
Economy and Climate Minister Robert Habeck

The surcharge will see ordinary people bear some of the soaring costs that gas importers are dealing with as energy prices shoot up because of Russia’s invasion of Ukraine, and Russia’s squeeze on gas exports to Germany.

The levy, to be imposed from October 1st, had been grudgingly accepted as a compromise to help prevent the energy market from collapsing.

But it has sparked outrage after it emerged that the 12 companies who have registered to receive a share of the levy include energy traders like Axpo or Gunvor – both of which have recorded doubling revenues in the the last half of the year.

German Economy and Climate Minister Robert Habeck has promised to change the draft levy law to prevent this from happening.

“We will solve this problem,” Habeck, of the Green party, told German broadcaster ZDF on Sunday. 

The correction to the law will be aimed at preventing energy firms from economically benefiting.

Habeck slammed the fact that “companies are taking advantage of it”.

READ ALSO: Pressure mounts on Germany to prevent energy firms from taking advantage of gas levy 

However, he maintained that the gas levy was needed. He said it was “an unpleasant step, an unpleasant decision, but a necessary decision”.

‘No extra profits’

Pressure is building on Habeck to repair the damage immediately.

His coalition partners from the Social Democrats (SPD) and the Free Democrats (FDP) say amendments to the law must be made by Tuesday when a government retreat is set to take place. 

“Errors should be eliminated by the cabinet retreat,” FDP parliamentary group leader Christian Dürr told Bild newspaper. He added that the gas levy should “in no way lead to extra profits for companies”.

“We must be careful that government intervention does not make the energy crisis worse,” Dürr warned.

SPD member of parliament Ralf Stegner told Bild that the cabinet retreat in Meseberg, Brandenburg, was “the right place and the right time to renegotiate the gas levy”.

He said that the current plans were “unfair” because they offer “corporations that are not in need and have made millions in profits over the years the opportunity for extra profits”.

READ ALSO: Will energy companies profit from Germany’s gas levy on consumers?

Stegner added: “At the same time, it exacerbates social hardship for millions of consumers.”

SPD leader Lars Klingbeil previously accused Habeck of making “errors” when putting together the gas levy. 

The surcharge, set at 2.419 cents per kilowatt hour, works out to around €483.80 extra for a family of four with an annual average energy usage of 20,000 kwh.

The Kiel Institute for the World Economy estimates that the levy will send Germany’s already soaring inflation rate up by another 0.9 percentage points.

To help consumers cope, Germany is to temporarily slash the sales tax on gas to seven percent from 19 percent. But that is not expected to fully offset the gas levy and the general rising energy costs. 

READ ALSO: What does Germany’s VAT cut mean for you?

Member comments

  1. Imagine voting for politicians who said they stood for making Germany better for everyone..
    (excluding the greens they don’t like Germany or native Germans)
    They continue for screw over the working class and the poor while covering over their own corruption.
    At least the AFD would have done it with some good old Russian oil for lube.

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ENERGY

Norway and Germany seek Nato-led cooperation for key undersea structures

Germany and Norway want to start a NATO-led alliance to protect critical underwater infrastructure, their leaders said on Wednesday, weeks after explosions hit two key gas pipelines in the fallout from the war in Ukraine.

Norway and Germany seek Nato-led cooperation for key undersea structures

 “We are in the process of asking the NATO Secretary General to set up a coordination office for the protection of underwater infrastructure,” German Chancellor Olaf Scholz told a press conference in Berlin.

“We take the protection of our critical infrastructure very seriously and nobody should believe that attacks will remain without consequences,” he said.

Norwegian Prime Minister Jonas Gahr Store said the alliance would be “an informal initiative to exchange between civilian and also military actors” with NATO providing “a centre, a coordination point”.

Underwater cables and pipelines were “arteries of the modern economy” and it was necessary to create “a coordinated joint effort to ensure security for this infrastructure”, he said.

Scholz said he and Store would propose the plan to NATO Secretary General Jens Stoltenberg, who is due in Berlin for a security conference. The Nord Stream 1 and 2 gas pipelines off the Danish island of Bornholm were targeted by two huge explosions at the end of September.

The pipelines, which connect Russia to Germany, had been at the centre of geopolitical tensions as Moscow cut gas supplies to Europe in suspected
retaliation to Western sanctions over the invasion of Ukraine.

Although they were not in operation when the leaks occurred, they both still contained gas which spewed up through the water and into the atmosphere.

Russia and Western countries, particularly the United States, have traded bitter barbs over who is responsible for the blasts.

Several European countries have since taken steps to increase security around critical infrastructure. 

The G7 interior ministers warned earlier this month at a meeting in Germany that the Nord Stream explosions had highlighted “the need to better protect our critical infrastructure”.

Norway has become Europe’s main gas supplier in the wake of the war in Ukraine, taking the place of Russia.

The Scandinavian country has a vast network of pipelines, stretching for almost 9,000 kilometres, linking it to the continent, which experts have said are at risk of sabotage.

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