Austria appeals to European Commission in escalation of German gas tariff dispute

7 months ago 41

On Tuesday 16 April, the Austrian (EPP) Vice President of the European Parliament Othmar Karas joined with his country’s Energy Minister Leonore Gewessler, to submit an urgent parliamentary question to the European Commission, challenging the legality of Germany’s gas transit fees.

Germany went on a purchasing spree to fill its gas storage in 2022. Today, the government faces the financial repercussions of buying billions of cubic metres (bcm) of gas, purchased when prices were high, and now must be sold at a lower value.

To recoup the loss, and to cover the associated storage costs, all natural gas passing through the country is subject to a levy.

When this levy was raised to €1.86 per MWh of gas, Germany’s eastern neighbours complained to Brussels, saying this higher charge made the switch from Russian gas more costly.

The issue was addressed at a meeting of EU energy ministers in early March, to which the European Commission responded cautiously, but the dispute remains unresolved.

Now, Austria – who led the initial complaint with the Czechs – is upping the ante.

“I believe that a national export tax on gas is not only contrary to EU law, it also contradicts one of the fundamental principles of the EU,” said Karas, a member of the centre-right Austrian ÖVP party, in a press release on 16 April.

The request is for a “clear assessment” by the European Commission whether the German gas levy is compliant with “EU law and the rules of the internal market,” and what measures can be taken to “prevent further negative effects to the detriment of Austria.”

“Between October 2022 and December 2023, this German gas storage levy has already cost us around €39 million,” stressed Karas.

Austria, which concluded gas contracts for Russian gas until 2040, has struggled to diversify its supply.

In 2024, more than 95% of Austrian gas still comes from Russia – more than two years after Moscow attacked Ukraine and deployed gas supply as an ‘energy weapon’ against Europe.

According to Vienna, Germany is partly to blame. It “does not help, however, to make this diversification [away from Russia] more expensive through levies,” said Austrian Energy Minister Leonore Gewessler, who co-negotiated the initiative.

Gewessler is a member of the Green party, the junior partner in the Austrian government coalition with the centre-right ÖVP party.

Karas a member of ÖVP is considered estranged from the party and is not standing for re-election to the European Parliament in the June elections.

The German Ministry of Economy and Climate Action declined to comment on Austria’s complaints, but stressed that the gas levy “made a decisive contribution to European security of supply and the stabilisation of prices.”

“Trade between member states is not restricted by the levy, meaning that there is no justification for turning to Russian gas,” a spokesperson explained, adding that it is “non-discriminatory and is charged at the same rate for all quantities supplied.”

The Berlaymont must respond within 3 weeks. Then, if Austria wanted to pursue the matter, it could take Germany to court again – the previous government won a highway tariff case against Berlin.

Other countries are following the dispute closely. Italy has already frozen plans for a similar gas transit fee in March, after concerted opposition from neighbouring EU countries.

[Edited by Donagh Cagney/Rajnish Singh]