German gas tax riles neighbors in race to ditch Russian fuel

By Gabriel Gavin, Victor Jack | 02/23/2024 06:42 AM EST

Berlin’s bid to cash in on EU countries’ energy needs must be blocked by Brussels, a Czech-led bloc is demanding.

A multimillion-euro levy imposed by Berlin on exports of natural gas to other countries is undermining efforts to end dependency on Moscow and should be tackled by the EU, a coalition of Central and Eastern European nations is urging.

In an agenda item for an upcoming meeting of the bloc’s energy ministers in March, seen by POLITICO, the Czech Republic, Austria, Hungary and Slovakia say the measure, “poses significant challenges for the European gas market and has broader implications for energy security, economic competitiveness, and regulatory coherence within the EU.”

The tax is designed to help fund an almost €10 billion black hole in Germany’s budget resulting from large-scale natural-gas purchases to meet storage targets at short notice just as prices skyrocketed in 2022. However, it has been increased several times in the past two months alone and now stands at €1.86 per megawatt-hour. Germany is a major hub for energy infrastructure, reexporting supplies purchased from abroad to EU member states like the Czech Republic, the Netherlands and Austria.


The countries say the move threatens to divide the European energy market, increasing costs for consumers and making it harder for EU countries that want to diversify their energy sources away from Russia. According to the document, it “favors Russian gas supplies, which contradicts the EU’s geopolitical and energy security goals.”