Germany's gas commission proposes 35-billion-euro aid package for consumers and businesses

The plan envisions an energy bonus covering one month’s worth of bills in 2022 and a price break in early 2023

Today, Germany’s expert commission, tasked with developing measures to ease the gas crisis, delivered a set of policy proposals to Chancellor Olaf Scholz. The commission’s plan envisions a two-step system that could end up costing the German Federal Government around 35 billion euros if the Bundestag decides to adopt all proposals.

The draft plan proposes offering immediate relief for households and businesses in 2022, while the period between 2023 and 2024 could bring price breaks for consumers.

Balancing savings and household aid

While the propositions of the commission were handed to the Chancellor’s office with unanimous approval, Reuters reports that members have spoken out, saying it offers little in the way of incentivising citizens to curb gas consumption.

This could prove to be a real issue despite German gas reserves sitting at 93.03%, as of 7 October, according to an official government statement. This is because of the high consumption of both private households and industry.

The situation would force Germany to maintain an energy savings policy and cut its consumption by 20%, rather than the 15% mandated by the EU Commission for other member states. This figure and predictions for winter scenarios are still not set in stone though, as the situation is still subject to change depending on the price of natural gas on the free market and temperatures during the winter months. 

The draft proposal

A key thing to remember is that the current proposal is a draft, submitted by the expert commission that still needs to go through the German Parliament. Nevertheless, the policy proposal puts the bill for these energy measures at just 35 million euros by early 2024.

This sum should be covered by Chancellor Scholz’s proposed 200 billion relief package, announced last month to help Europe’s largest economy through the energy crisis.

The plan envisions a 5-billion-euro energy bonus for households and small and medium-sized businesses. The bonus would cover energy bills for one month, most likely in December.

Meanwhile, the second stage of energy aid should kick in March-April 2023 and should last for about one year, as Reuters reports. It should cap the price of energy at about 12-14 cents per kilowatt hour, while the rest 60% to 80% should be covered by the state and the rest – by consumers.