Germany’s natgas levy to cost chem industry more than €3bn/year – VCI

LONDON (ICIS)–Germany’s levy on natural gas consumption (“Gasumlage”) will cost the country’s chemical-pharmaceutical industry more than €3bn/year, according to an estimate by producers’ trade group VCI.

The estimate comes after the levy was set at euro cent 2.419 per kilowatt hour (€24.19/MWh) on Monday.

Gas consumers will have to pay the levy starting on 1 October 2022 until 1 April 2024, when it will expire.

The levy will allow the government to raise funds to cover 90% of the additional costs gas importing power firms incur because of the shortfalls in Russian gas supplies.

While the chemical industry recognises the need for the levy, it is worried about its impacts, said VCI director general Wolfgang Grosse Entrup.

From an economic point of view, the levy was the best way to manage the gas supply situation, he said.

“But doing the right thing also has side effects: For our energy-intensive industry, which has already been hit hard, it is an extremely bitter pill,” he said.

Burdens from high gas and electricity prices, as well as expensive raw materials, have pushed many producers to the breaking point, he said.

He urged the government to keep the levy as low as possible.

“We must not endanger the economic performance of our companies. Companies that are particularly affected now need relief,” he said.

VCI is in “intensive dialogue” with the federal government on such relief, he added.

The country’s economic affairs ministry previously indicated that the levy, which will be adjusted every three months, could rise as high as euro cent 5.0/kWh.