(March 26): Germany’s conservatives and Social Democrats agreed to abolish its gas storage levy in an effort to lower energy bills.

“We will abolish the gas storage levy for everyone,” according to a working paper prepared earlier this week as part of talks to form a new coalition government. 

Manufacturers and households currently pay a levy that covers costs incurred by operators when refilling storage facilities, introduced in the aftermath of the energy crisis to ensure supply security.

Earlier this month, Germany’s BDI lobby group urged the government to exempt industry from the fee — or find other ways to create more flexibility around gas stockpiling targets — arguing high energy costs have contributed to an unrelenting downturn in manufacturing.

The parties said they would “introduce appropriate instruments to ensure secure and more cost-effective gas storage filling” to support “long-term, diversified, low-cost gas supply contracts with international gas suppliers.”

Germany used to also apply the charge at cross-border interconnection points, but was criticised by its neighbours for making it more expensive to obtain fuel. The border surcharge was scrapped late last year.

The incoming government has said it wants to lower energy bills for companies and consumers by at least five Euro cents (24 sen) per kilowatt-hour. In the working paper, the parties said they would lower power taxes to a European minimum and reduce surcharges and grid fees. They didn’t specify how gas stockpiling will be ensured going forward.

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