IW: Large part of gas consumption enjoys tax privileges | free press

IW: Large part of gas consumption enjoys tax privileges |  free press

Gas is a precious commodity these days. So far, however, the state has given industry consumers strong support, as a study shows.


Gas consumers in industry in Germany have so far benefited from far-reaching tax breaks. Economists from the Cologne Institute of the German Economy (IW) present this in a recent paper.

According to this, the companies concerned received benefits for 447 terawatt hours of 2.1 billion euros last year in the form of tax reductions and subsidies.

According to the IW, 44 percent of German gas consumption in the previous year was tax-privileged – with a small part of the concessions relating to consumption in previous years. In 2021, this resulted in reduced tax revenue of around 2.1 billion euros.

What seems surprising in times of gas shortages has to do with the role that gas is actually intended to play in the energy transition. Until shortly before Russia attacked Ukraine at the end of February, the energy source was seen as a bridge to more climate protection. The tax approaches correspond to this logic. A large part of this went into electricity generation from gas, which is now politically undesired due to the impending shortage of gas. The manufacturing sector also benefited.

Tax benefits are a double-edged sword

From today’s perspective, these advantages are a double-edged sword, the authors of the analysis note. “Most importantly, most of the perks accruing from using gas to generate electricity need to be reconsidered in times of gas shortages.”

In order to provide an incentive for the switch to green hydrogen and other technologies, the discounts for electricity generation from gas could be reduced and the additional tax revenue of up to 1.3 billion euros used to promote alternative forms of electricity generation and to finance currently targeted relief measures. suggest the authors. “In addition, the gas saved from generating electricity could be used in industry or for heating households.”

On the other hand, the tax concessions in view of the high gas prices relieved industrial companies. “Against the background of rising inflation, some tax breaks for gas consumption can therefore also dampen the pressure on companies to pass on the increased costs to consumers,” say the economists. (dpa)


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