The Gas Price Commission has submitted its final report, but things are getting tricky when it comes to important detailed questions. Those involved did not come to the same agreement as the traffic light coalition would have liked. Central problems of the gas price brake remain unresolved.
The gas price commission set up by the federal government presented its final report this Monday, thereby returning the ball to politicians. Because the traffic light coalition was unable to agree on a mechanism in September to cushion the energy price bills of consumers and companies, the coalition committee pulled the commission out of a hat in the last ditch. Scientists, politicians and associations should work out solutions together that are acceptable for each of the three coalition partners. The proposals that have been ordered are now available, but the Federal Government and the government factions are threatened with new difficulties because numerous important detailed questions in the political arena have to be decided.
A first stress test is already pending: The legal basis for the one-time reimbursement of December installments must be enacted by the Bundestag by the middle of the month. According to the Commission’s idea, the suppliers should report the number of their connections and the total sums to be reimbursed to the federal government by the end of November. The federal government should then pay these amounts to the suppliers by December 1st, so that they can pass the money on to the owners of the gas connections by December 20th. So time is extremely short.
In addition, there are already considerable doubts in the government faction as to whether the one-time down payment will suffice until the gas price brake, which is expected to come into force in March. “In particular, we must now find a solution for the time until the brake comes into force, which, according to the suppliers, can only take effect for private households and medium-sized companies in March for organizational reasons,” explained SPD parliamentary group leader Matthias Miersch. He had represented the party on the commission and obviously attaches importance to the statement that quicker solutions failed because of the suppliers. In an interview with ntv.de, Miersch suggested paying a second down payment in the first quarter or, if that is technically possible, making the gas price brake retrospective.
The gas price brake itself will be an instrument that is not easy to convey: Because the energy suppliers do not know whether a large family with low income, a lonely, rich pensioner with a huge villa or a company is behind a connection, they see themselves unable to implement a cap . However, the fact that the state massively subsidizes high-income to very rich people for 80 percent of their energy consumption, while their consumption is often far higher than that of low-income earners, makes the gas price brake unnecessarily expensive and difficult to convey.
If the top ten percent of incomes have to tax the refunds received as a benefit in kind, as proposed by the Commission, this only partially reduces the imbalance. Especially since it is also questionable why couples with an annual income of 100,000 euros and more should possibly receive thousands of euros from tax funds. Difficult debates are still ahead of the coalition.
Miersch hopes that the companies will get the relevant data from their customers by winter 2023/2024 and that an upper limit could be introduced at least for this period. The utilities are signaling little willingness to do so, also for reasons of data protection. In the end, companies and the federal government may have had an unprecedented data map of Germany in their hands, in which the number of residents is also known for every address in the country. Will the FDP, which according to its self-image sympathizes equally with data protection and with the concerns of companies, play along?
Frictions are also to be expected from the gas price brake for companies. The Commission recommends – in agreement with the SPD, among others – that companies using the gas price brake should give a location guarantee in return. 90 percent of the jobs would have to be retained for a year beyond the benefit granted. Otherwise, the subsidies granted on 80 percent of energy consumption would have to be reimbursed.
The President of the Association of German Chambers of Industry and Commerce, Peter Adrian, did not want to go along with the Commission’s proposal. In a dissenting opinion attached to the final report, Adrian warns that “many companies, especially medium-sized industrial companies” could be overwhelmed by such high requirements. He therefore votes against the relevant passage.
Isabella Weber, who is regarded as the inventor of the gas price brake, was also unable to resist a dissenting vote because a recommendation from the gas price commission contradicted her convictions. Weber warns that companies should be allowed to resell gas volumes that they have bought and received subsidized by the state to other large consumers. This option is intended to act as an incentive to save, so that companies can reduce consumption and generate additional income in economically difficult times.
However, Weber warns of an unwanted effect: the temporary or permanent closure of entire production facilities. Companies could pocket the energy subsidies, resell the gas they bought so cheaply with a high margin and shut down their own operations. This can make good business sense, but be devastating for the economy as a whole. Especially when it comes to raw materials producing, energy-intensive companies whose products are urgently needed by other processing companies. Weber therefore urgently warns of cascading effects in which the loss of a few production sites will permanently remove entire sectors from Germany as an industrial location.
Another conflict: The Greens group wants to prevent payouts and dividend payments if corporate profits have only come about with the help of the taxpayer-financed gas price brake. “We need to focus on those who really need help. That also means that large companies that receive support should not pay out high dividends and bonuses at the same time,” parliamentary group leader Andreas Audretsch told Reuters.
This presents companies with a dilemma: stock corporations aim for profit and its distribution to investors. Anyone who does not register for the gas price brake in order not to alienate shareholders is possibly making a risky bet in view of the uncertainties in the gas market. The Gas Price Commission does not even comment on this question. Politicians have to solve some problems themselves.
