German Parliament set to vote on gas storage levy amendment Dec 20

The German Parliament -- the Bundestag -- is to vote Dec. 20 on a draft law that would abolish the country's gas storage levy on cross-border flows from Jan. 1, the latest Bundestag agenda showed.

The draft law is the first item on the agenda for Dec. 20, set for 0900 local time (08:00 GMT), with the vote expected to take place after around 40 minutes of debate, the Bundestag said.

Germany pledged in May to scrap the controversial charge for cross-border points from January 2025 following widespread condemnation of the charge and its impact on the European gas market.

However, there were concerns that the necessary legislation may not be passed before the end of year after the collapse of the ruling German coalition in November.

The German government said that under the draft law, the legal basis for collecting the gas storage levy would be changed so that from Jan. 1, 2025, the charge would only be levied on domestic gas.

"Border crossing points and virtual coupling points, via which gas exported abroad have previously been included in the gas storage levy, will no longer be charged with the gas storage levy in the future," it said.

It said this would dispel European Commission doubts regarding the charge and make it easier for EU member states that rely on gas transit through Germany to diversify their supply routes to move away from Russian gas.

Austrian concerns

Germany introduced the neutrality charge in late 2022 to offset the high costs it incurred from strategic gas storage filling in the summer and autumn of that year.

The charge adds to the cost for countries -- especially those in Central and Eastern Europe -- that take gas via Germany, including imports of LNG from the US and pipeline gas from Norway.

It also made Russian gas imports more competitive as these volumes could reach markets such as Austria, Slovakia and the Czech Republic without passing through Germany.

On Dec. 16, Austria's energy minister Leonore Gewessler said the law needed to be passed, with Vienna set to continue to pressure Germany on the issue.

"The German neutrality charge is a burden on our path to ending our dependence on Russian gas," Gewessler wrote on X, formerly known as Twitter.

"It increases the cost of gas imports via Germany to Austria and thus our diversification: more than Eur60 million [$63 million] in additional costs have now been incurred," she said.

"This tax, which is contrary to European law must be abolished in the interests of customers. In recent days we have received more and more positive signals that the tax will be dropped," she said.

"Nevertheless, I would like to be prepared for all eventualities. If the removal of the tax is further delayed, Austria has the option of taking legal action before the European Court of Justice. We are preparing for this."

The dispute comes as European gas prices remain relatively high. Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price on Dec. 17 at Eur41.65/MWh.

Charge billing

German market manager Trading Hub Europe (THE) -- which sets the neutrality charge -- has said it would continue to monitor the legislative process of amending the country's energy law to remove the charge at cross-border points.

The levy is billed monthly as part of the balancing group settlement but is settled under a "month plus two months" schedule.

This means that the balancing group settlement for the month of January, for example, will take place from the end of March.

The charge was initially set at Eur0.59/MWh but was repeatedly increased and reached Eur1.86/MWh in January this year before THE said in May it would rise to Eur2.50/MWh from July until December 2024.

THE said last month it would raise the gas neutrality charge to Eur2.99/MWh from Jan. 1, 2025, but would exempt volumes at interconnection points.