June 22, 2024
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OIL & GAS

European Commission to Sue Germany over Gas Tariff

The European Commission is poised to initiate legal action against Germany for imposing an additional fee on its neighbors for purchasing gas from its storage facilities, in what is perceived as a violation of the EU’s single market regulations, Reuters says.

The suit, known as an infringement procedure, is expected to be launched in the coming days, reflecting concerns over Germany’s tariff, which has more than tripled since its introduction in October 2022.

This fee was implemented in response to the European energy crisis, triggered by reduced gas flows from Moscow and the shutdown of the Nord Stream pipeline, a key route for Europe’s gas imports.

“We remain in touch with the German authorities on this matter, including at political level…we do not speculate on the possible opening of infringement procedures,” a spokesperson for the Commission said.

A spokesperson for Germany’s economy and climate ministry said the levy was nondiscriminatory and other EU countries had benefited from Germany rapidly filling its vast gas storage.

“This measure has made a decisive contribution to European security of supply and price stabilisation,” the spokesperson said in an emailed statement.

The European Commission’s infringement process typically involves issuing notices requesting information, followed by requests for compliance with EU law before potentially referring the matter to the European Court of Justice. This procedure can span several months.

The Czech Republic, Austria, Slovakia and Hungary in particular have been pushing the Commission to take action against the German levy.

EU energy regulator ACER has said such charges resulted in higher gas prices in some countries, and should not be applied on cross-border trade.

Energy Commissioner Kadri Simson has expressed concerns that the levy undermines EU solidarity and efforts to reduce reliance on Russian gas.

“Trade between member states is not restricted by the levy, so there is no justification for switching to Russian gas,” the spokesperson for Germany’s economy and climate ministry said.

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