Trading Hub Europe has announced on 15 August 2022 that 2.419 cents per kilowatt hour gas levy will come into effect in October. The German Steel Federation WV Stahl President Mr Hans Jürgen Kerkhoff said “The gas levy increases the cost pressure on the steel industry, which already exists due to the extreme price increases on the energy markets. Competitive prices for gas and electricity are a basic requirement for steel production and steel-based value creation in Germany, especially on the way to a climate-neutral future. The federal government urgently needs to find ways to limit the costs of the gas levy.”

The significant increases in energy prices are currently leading to additional costs of around 7 billion euros for companies compared to the previous year. With the gas levy that has now been determined, around 500 million euros will be added annually.”

The energy-intensive industries in Germany are very concerned about their future in Germany. They depend on affordable energy for their international competitiveness. The pressure on companies has been increasing for months due to the drastic price increases for electricity, gas and other energy sources. The gas levy that has been decided on reinforces this further. A level of 5 cents per kilowatt hour would mean costs of over 11 billion euros for the EID companies, an additional additional burden of almost 13,000 euros per workplace on average. In addition, a gas storage levy is to be levied from October. Both surcharges have an even further cost-increasing effect on the price of electricity. EID Managing Director Mr Jörg Rothermel said “These multiple burdens pose a massive threat to energy-intensive companies in Germany, says. We don't just have an international problem. In other EU member states, drastic relief for companies and consumers was decided instead of additional burdens, which go far beyond the 'protective umbrella' in Germany. Industry and private consumers are both affected by the acute energy price crisis. It is therefore important to relieve groups that are particularly affected, such as energy-intensive companies, without additional burdens for private consumers from the federal budget.”

Natural gas is required in steel production to generate process heat and can hardly be replaced in these processes in the short term. The steel industry in Germany uses around 2 billion cubic meters of natural gas every year. This roughly corresponds to the per capita consumption in private households in Berlin and Munich together.

The aim of the gas surcharge is to prevent gas importers from defaulting on payments due to high replacement procurement costs. This is to keep the existing gas system stable.

India Knock WTO for Consultations with UK on Safeguard Measures

Strategic Research Institute

Related Stories