Germany’s neighbors call for end of year-end gas tax

Austria, the Czech Republic and Slovakia have called on Germany to legislate this month to scrap a costly gas tax for neighboring countries, as the collapse of Berlin’s coalition government risks delaying the law, according to a document seen by Reuters.

Following complaints from Central European countries, Germany agreed in May to remove the tariff it imposes on neighboring countries for the purchase of gas from its reserves. Berlin introduced the measure to cover the high costs of replacing Russian gas after Moscow cut deliveries in 2022.

But the collapse of Germany’s coalition government delayed the adoption of a bill that would limit the application of the tariff to German customers only.

In a joint document, Austria, the Czech Republic and Slovakia noted the delays and said the planned expiration at the end of the year of a Russian deal to supply gas to Europe via Ukraine made the removal of the German tax more urgent.

“It is imperative to remove all barriers that hinder our diversification efforts,” says the document, which describes the tax as an “artificial increase” in prices that hinders countries’ efforts to abandon Russian gas.

“We once again call on Germany to ensure the adoption of the amendment as quickly as possible […] aimed at abolishing the application of the gas storage neutrality tax at borders with neighboring countries from January 1,” the document added.

The document was distributed to EU countries, whose energy ministers will discuss the tax at a meeting in Brussels on Monday.

Central European countries are concerned about security and energy prices this winter. In recent weeks, cold weather and falling renewable energy production have pushed gas prices in Europe to their highest level in 12 months.

German network operator Trading Hub Europe said the tariff would rise by a fifth next year, assuming the tax is limited to German customers only.