Important news

Storage levy in Germany and soon in Italy?

In Germany, the gas storage levy, i.e. a fee for withdrawal from the transmission system even when crossing the border, will be increased to EUR 1.86/MWh from 1 January 2024. This will make gas imports from Germany even less attractive.

In addition, the Italian regulatory authority ARERA recently published a consultation document proposing to levy a "neutrality charge" of €2.1908/MWh on gas withdrawals from the Italian transmission system and thus also on exports from Italy from 1 April 2024.

Source: ARERA

In our view, the German gas storage levy is already in breach of EU law, as it hinders cross-border trade. We are very surprised that the European Commission, which is expressly informed about the case, has not taken any recognizable measures. The legislative process to extend the legal basis for the storage levy is currently underway in Germany. Unfortunately, the German legislator is not prepared to use this procedure to correct the current mechanism for levying the gas storage levy.

With these additional costs for exports from Germany, Germany is becoming an "entry zone" and is de facto no longer an entry-exit zone, as can be seen from the development of exit flows at most German IPs. In total, gas exports from Germany fell by more than 50 % in 2023 compared to 2023. In the second half of 2023, with the increase in the gas storage levy to EUR 1.45 / MWh, the decline in exports from Germany to Austria is even 84 % compared to the same period in 2022.

The Austrian VTP is to a certain extent disconnected from the North-West European market. Neither short-term trading nor long-term commitments for gas supplies from Germany can develop in this situation. In view of the gas storage neutrality account of the German market area manager THE with a current negative balance of EUR 8.6 billion, the probability of an additional and significant increase in the levy appears very high. This means that market-driven efforts to diversify the sources of supply for the Austrian gas market will be made more difficult or even prevented in any case.

Apparently, this German practice is now also being imitated in Italy.  The recently published consultation on the planned introduction of a "neutrality charge" of €2.1908/MWh for exports from Italy from April 1 by the Italian regulatory authority ARERA would once again hit the Austrian gas market hard. This would also make the second possible source for diversifying the Austrian gas supply significantly more expensive and therefore less attractive.

With this development, the European internal market is on the verge of collapse and the decoupling of the various market areas will be further exacerbated. This is definitely not good news for security of supply in Austria and the (solidarity) provisions of the EU's SOS Regulation are being reduced to absurdity with these national measures.
But perhaps this ARERA initiative is just a wake-up call to the European Commission to finally address the German gas storage levy. Complaints to this effect were submitted to Brussels months ago by several market participants, but the European Commission has yet to take a position on the matter.

We are hoping for the best. In view of the planned date for the Italian "neutrality charge" to come into force, we can still hope that the consultation is just a premature April Fool's joke.

AGGM Austrian Gas Grid
Management AG
Peak Vienna
Floridsdorfer Hauptstraße 1
1210 Vienna, Austria

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