The European Commission agreed at an energy ministers’ meeting in Brussels on March 4 that Germany’s levy on natural gas exiting its territory probably violates EU law, Czech Industry Minister Jozef Sikela has revealed.

The levy, set at €1.86 per MWh ($21.5 per 1,000 cubic metres) for the first six months of this year, has been criticised for putting EU energy solidarity at risk and undermining efforts to eliminate Russian gas imports. The commission has “serious doubts” that the tax aligns with EU law and has sent Germany “an official letter” about it, Sikela said. The EU executive will hold further talks with concerned parties on the matter.

Germany argues that the levy, which its network operator has already raised several times, is justified by the significant investment that the country has made in its energy infrastructure, which has brought benefits for other EU member states. Germany has by far more gas storage capacity than any other European country, accounting for around a quarter of the EU’s total.

The German government has heard the objections to the levy and will take part in further discussions, according to Sikela.

The ministry noted that an agreement between Germany and the commission was better than formal infringement proceedings, adding that the Czech Republic would only react further if the negotiations lead to an “unsatisfactory” conclusion.

Supported by Slovakia, Poland, Hungary and Austria, the Czech Republic pushed for the levy to be discussed at the energy ministers’ meeting. The Czech government argues that the charges for gas imported from Germany, either from storage or via regasified LNG or other supply, may make Russian gas “more favourable” in terms of pricing than “geopolitically safer alternatives.” This puts security of supply at risk in countries that do not have direct access to LNG imports, Sikela argued.

Austria, the Czech Republic, Hungary and Slovakia still rely significantly on Russian gas imports, despite the EU goal of eliminating Russian energy from its system within a few years. For those countries, LNG or pipeline supply imported via Germany is one of the few alternative sources, and bottlenecks within the German gas grid could limit this option, they argue.

The widespread expectation is that Russian gas transit via Ukraine will end this year, with the commission stating it sees no justification for its renewal. This would impact gas supply to Central Europe, Sikela said. He also called on the German gas grid’s capacity to be “strengthened” to support increased flow to its neighbours, particularly at the Brandov interconnection point between Germany and the Czech Republic.

In the event of Ukrainian transit ending, Central European countries may be able to continue receiving Russian gas at the Russia-Ukraine border and taking responsibility themselves for its transit via the latter country. But if this does not happen, west-to-east transport capacity in Germany is not enough to meet Central European demand if there is a spike in consumption. 

Gascade data shows that there is about 240 GWh per day of firm freely allocable gas transport capacity from Germany to the Czech Republic available for most of this year at Brandov. Roughly 1.4 TWh per day of capacity can be booked as interruptible dynamically allocable gas transport capacity, which means there is no guarantee it will be available. In comparison, Net4Gas provided around 2.2 TWh per day of firm capacity for entry into the Czech Republic at Brandov for March.

"We have to start discussions with Germany about further acceleration of planned investments into transport capacity," Sikela said.

Some Central European countries will find it harder to wean themselves off Russian gas than others. Austria’s state energy company OMV, for example, is locked into a long-term, take-or-pay gas supply contract with Russia’s Gazprom that does not expire until 2040. Austria’s government notably said in February it would consider breaking that contract to protect national energy security. The announcement comes as the government prepares for an election this autumn.