Germany’s Gas Storage Levy Hinders Cross-Border Trade, Warns AGGM

Germany’s gas storage levy has been deemed against EU law by Austrian area market manager AGGM, as it obstructs cross-border trade and restricts Germany to being an entry zone only. The levy, which imposes a fee on gas leaving the German grid, has caused export flows from Germany to neighboring countries to plummet and Austrian prices to become disconnected from the northwest European market. AGGM expressed surprise that the European Commission has not taken action to address the issue. The drop in exports not only affects the income of German market area manager THE but also reduces the tariff revenues of German transmission system operators. Austria may introduce its own storage levy if Germany’s is found to comply with EU law, further impeding the Austrian market. Efforts to diversify away from Russian gas are also hindered by the potential introduction of a storage levy in Italy. Despite these challenges, increasing import capacity from Italy remains a priority for Austria. The liquidation of the Austrian state gas reserve is not yet planned, as maintaining high storage levels is crucial for security of supply. The uncertainties surrounding gas imports in Europe have heightened the importance of gas storage for security of supply and price stability. While the state reserve occupies a significant percentage of Austria’s total storage capacity, AGGM believes it is necessary to ensure security of supply throughout the year.