Oil & Gas

Germany windfall tax delayed until beginning of December

Germany will delay the start of a planned windfall tax for power producers, the Economy Ministry said.

Instead of applying the tax retroactively from September, it will go into effect starting December until the end of June 2023, according to a statement on Friday.

The decision came after energy lobby groups had criticized the planned levy, which is designed to fund parts of a broader effort to cap gas and power prices for households and businesses. The package was approved by cabinet on Friday, German Chancellor Olaf Scholz said in Berlin.

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Last week, Germany set out its plan to claw back 90% of the earnings from some clean power generators as the government seeks funding for its consumer aid package.

The government is planning to skim earnings above €130 a megawatt-hour for solar, wind and nuclear, according to a draft law seen by Bloomberg News. Politicians are trying to reclaim some of the profits that companies like RWE AG are making from high power prices.

The windfall tax will be applied to electricity producers based on the fuel they use. Lignite plants will be taxed on earnings above €82 a megawatt hour and oil plants above €280.

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