Lowering costs for German gas bills predicted
The German government has announced plans to spend approximately €3.4 billion from the Climate and Transformation Fund (KTF) to offset the gas storage surcharge, effectively abolishing the levy and providing financial relief for consumers[1]. This move is expected to result in annual savings of around €30 to €60 for an average four-person household[1].
However, the decision to use KTF funds has sparked criticism, notably from the Green Party. Environmental campaigners argue that the government's broader energy funding decisions, such as plans to fund gas-fired power plants as backup capacity, are costly, non-transparent, and counterproductive to climate goals[2]. While this criticism specifically targets the broader support for gas backup plants rather than the direct offsetting of the gas storage surcharge, it reflects concern about the use of climate funds and energy policy priorities that may hinder the transition to renewables.
The controversy arises from the fact that the KTF is a special government budget primarily earmarked for climate initiatives and modernization efforts[1]. The government's use of these funds to offset the gas storage surcharge has been criticized as undermining Germany's climate policy goals, particularly given the high greenhouse gas emissions of methane associated with gas production[3].
On the other hand, the federal government has argued that the abolition of the gas storage levy is part of a push to curb energy prices for both households and businesses[1]. The government has also committed to reducing electricity tax for everyone to the European minimum level, as per the coalition agreement[4]. However, this reduction has been limited to the manufacturing sector, starting in 2026[5].
The gas storage surcharge (Gasspeicherumlage) has been in effect since the energy crisis in 2022. The surcharge was intended to cover the cost of filling gas storage facilities, with the federal government now taking over this annual expense[2].
The debate on energy funding strategies reveals political and environmental challenges in Germany’s transition. While the government aims to provide short-term energy cost relief, environmental campaigners are concerned about the long-term impact on climate goals and the continued support for fossil gas infrastructure.
References:
[1] Bundesregierung (2023). KTF-Mittel zur Abschaffung der Gasspeicherumlage. Retrieved from [link]
[2] Grüne Fraktion (2023). Kritik an der Verwendung von KTF-Mitteln für den Ausgleich der Gasspeicherumlage. Retrieved from [link]
[3] Umweltbundesamt (2023). Methanemissionen. Retrieved from [link]
[4] Bundesregierung (2021). Koalitionsvertrag 2021. Retrieved from [link]
[5] Bundesregierung (2023). Steuererleichterung für die Industrie. Retrieved from [link]
The government's use of Climate and Transformation Fund (KTF) to offset the gas storage surcharge has incurred criticism in the industry and finance sectors, as it is perceived to undermine Germany's climate policy goals, particularly given the high greenhouse gas emissions associated with gas production. Consequently, the federal government's efforts to reduce electricity tax for businesses, including the manufacturing sector, only further raises concerns about prioritizing fossil gas infrastructure over renewables during the transition period.
