Plans to scrap German gas storage fees may fall through as government coalition collapses

LONDON (ICIS)–Germany’s controversial gas storage fee may be rolled forward into January 2025 as plans to scrap it may not be approved following the fall of the coalition government.

The German government announced earlier in June the charge levied on gas exported from the country would be scrapped from January 1, 2025.

But the fee abolishment has not been formally approved by the German parliament yet, and traders now fear that following the collapse of the government on 7 November, and plans for snap elections, proposals to scrap the fee would drop off the agenda before the end of the year.

The fee was introduced in 2022 and has been increased every six months, raising discontent from regional countries pinning their hopes on imports from or via Germany.

It was raised from €1.86/MWh to €2.5/MWh from 1 July 2024.

The German Federal Ministry for Economic Affairs and Climate Action did not immediately reply to ICIS’s questions related to proposals to scrap the fee.

It is unclear whether the proposals were part of a wider Ukraine assistance package, which was expected to be adopted in the upcoming weeks.

“This is already having an impact on a decision involving gas flows,” Doug Wood, gas committee chair at Energy Traders Europe, told ICIS on 7 November.

“We hope this can be resolved before the end of the year.”

Wood said that if the proposal to scrap the fee is included in the Ukraine assistance package it may have greater chances to be approved before the end of the year.

The fee was strongly opposed by companies and regulators in central and eastern Europe, because since its introduction, the cost to import gas from or via Germany had risen significantly,

Markus Krug, deputy head of gas department at the Austrian regulator E-Control, told ICIS the watchdog was “very much concerned in which direction the situation is going. ”

He said E-Control may have to take a decision to approach the European Commission and the Agency for the Cooperation of Energy Regulators once again and raise their concerns about the impact of the fee on gas flows in central and eastern Europe.