Germany's upcoming gas bills could see a drop in prices
The German government has announced a series of measures aimed at providing significant relief to households and businesses from escalating energy costs. By 2026, a typical household can expect an energy bill reduction of approximately €300 annually, according to recent estimates.
The cornerstone of this relief package is the government's decision to offset the gas storage surcharge, a levy introduced during the energy crisis in 2022, which has been a major contributor to rising energy costs for households and businesses over the last two and a half years. Under a new plan, the federal government will take over the €3.4 billion annual expense associated with filling gas storage facilities, meaning that companies and consumers will no longer pay the surcharge directly.
In addition to the gas storage surcharge relief, the government has also proposed to eliminate the EEG surcharge, a levy imposed on electricity to fund renewable energy projects. The removal of this surcharge will directly decrease electricity bills for households.
The Climate and Transformation Fund (KTF), earmarked for €100 billion for "climate and transformation projects," will be used to offset the gas storage surcharge. However, this decision has sparked criticism from the Green Party, who argue that the use of KTF funds to subsidize fossil fuel infrastructure undermines Germany's climate policy goals. Katrin Uhlig, KTF rapporteur for the Greens, has expressed her criticism about the restructuring of the KTF to promote relief for fossil gas.
Individual or two-person households can expect some, if smaller, savings on their gas bills, with a typical four-person household benefiting from savings of between €30 and €60 per year, depending on gas consumption levels. For larger industrial customers, the surcharge had accounted for about 5 percent of their gas bills.
The government has limited a reduction in the electricity tax to the manufacturing sector, starting in 2026. Sepp Mueller, deputy leader of the CDU/CSU parliamentary group, and Nina Scheer, energy policy spokesperson for the SPD parliamentary group, continue to advocate for a broader electricity tax reduction.
Despite previous commitments, a cut to the electricity tax for all consumers has been scrapped. Instead, the government has focused on measures aimed at reducing energy costs directly, such as the gas storage surcharge relief and the EEG surcharge elimination.
It is important to note that "natural gas" is primarily methane, which is about 80 times more harmful to the climate than CO2 in the short term. The use of KTF funds to subsidize gas prices is particularly egregious from a climate perspective. The Green Party argues that these funds should be used to support climate initiatives and modernization efforts, as per the KTF's primary earmarking.
In conclusion, the German government's energy relief package, which includes the gas storage surcharge relief and EEG surcharge elimination, is expected to provide notable relief to households and businesses by 2026. Additional benefits for low-income households and subsidies linked to energy-efficient technologies may further enhance savings. However, the decision to use KTF funds to offset the gas storage surcharge has sparked criticism, highlighting the ongoing tension between energy affordability and climate policy in Germany.
The government's decision to take over the annual expense associated with filling gas storage facilities, previously covered by the gas storage surcharge, is expected to directly decrease energy costs for both households and businesses in the industry sector. The removal of the EEG surcharge, aimed at funding renewable energy projects, will also lead to a decrease in electricity bills for households.
