German Cabinet Prepares End to Renewable Energy Surcharge

March 2022

Germany’s governing cabinet has approved draft wording for legislation to discontinue levies on electricity under the Renewable Energy Sources Act or EEG. The proposed change would come into effect on July 1, 2022.

The act, which has been around since 2000 and has been revised multiple times, helps finance the expansion of renewable power sources  by imposing surcharges on non-renewable ones. The EEG was the first green electricity feed-in tariff program in the world. According to the new plan, in future renewables will be subsidized through Germany’s general state budget.

The move will lower electricity prices and comes amidst worries about consumers and industry being overburdened.

“The discontinuation of the EEG surcharge can relieve some of the pressure,” said Minister for Economic Affairs and Climate Action Robert Habeck in a statement. “But in view of the exorbitant rise in prices, we need to discuss further relief. Above all, we need to put our energy supplies on more solid footing. We need to act with the same speed Tesla had in building its gigafactory in terms of liquid natural gas terminals and the expansion of renewable energy sources and power grids. The national government will use all the levers at our disposal.”

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