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Germany backs down in gas levy fight

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on POLITICO or enjoy below:

🗞️ Driving the news: Germany will abolish its gas storage levy at border crossing points by the end of 2024, following EU threats of legal action and regional pushback
• This decision reverses a policy introduced in 2022 to cover a €10 billion budget shortfall due to high gas purchase costs during the energy crisis

🔭 The context: The gas storage surcharge had caused friction with neighboring EU countries like the Czech Republic, Austria, Hungary, and Slovakia, which depend on German infrastructure for fuel imports
• These nations argued that the levy violated single-market rules and hindered their efforts to reduce reliance on Russian energy
• The European Commission supported these concerns, warning of potential legal action against Germany

🌍 Why it matters for the planet: Scrapping the levy supports the EU’s goals for a unified energy market and strengthens regional energy security, facilitating a shift away from Russian fossil fuels
•  This move underscores the importance of cooperative energy policies and equitable cost-sharing in achieving sustainable energy transitions

⏭️ What's next: Germany plans to officially remove the levy by January 1, 2025, requiring a legal amendment
• The decision is expected to reduce gas transit costs through Germany, aiding Central European countries in diversifying their energy sources
• Ongoing discussions will focus on fair distribution of energy security costs among EU member states

💬 One quote: "This could mitigate concerns over ultimately cutting gas imports from Russia. At the same time, it highlights the challenge around fairly sharing energy security-related costs between countries.” - Georg Zachmann, energy economist and senior fellow at Bruegel think tank

📈 One stat: As of November 1, 2023, EU-wide gas storage facilities were filled to 100%, surpassing the target of 90%

Click for more news covering the latest on energy transition

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