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Germany Shelves Consumer Electricity Tax Cut

It will instead ease household energy costs by abolishing the gas storage levy with public funding.

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Overview

  • Germany ranks fifth globally and second among G20 countries for residential electricity prices, with households paying an average of €0.38 per kilowatt-hour.
  • Finance Minister Lars Klingbeil’s draft budgets for 2025 and 2026 omit the coalition promise to lower the electricity tax to the EU minimum.
  • Instead of a tax cut, the government will abolish the gas storage levy through public funds and increase its share of grid expansion costs to reduce bills.
  • The decision has drawn criticism from the Green Party, consumer protection groups and the DIHK, who say private households have been left unsupported.
  • Data from co2online show Saxony’s per-capita use at 1,075 kWh versus Saarland’s 1,365 kWh, resulting in a 27 percent annual cost gap.