Germany is pushing back against a European Commission plan to tax electricity at a lower rate than natural gas, saying Brussels is trying to use electricity-market legislation to force through rules that should be handled under EU tax law. The fight is over who gets to decide, and how much room governments still have left when the Commission wants to move through a legal side door.
In a letter seen by Euronews, Germany said the Commission was seeking to introduce significant tax provisions through a legal instrument that could be adopted by qualified majority rather than the unanimity traditionally required for EU tax measures. That matters because the Brussels apparatus is not just proposing a policy tweak. It is trying to shift the legal ground beneath national budgets and tax systems, while keeping the language of market design and electrification polished enough to sound technical.
Brussels and the Tax Trap
The letter, signed by Bastian Fleig, Director General at the German's Ministry of Finance, said: "I have significant doubts that (the proposal) ... can be adopted by a qualified majority. (It) is contrary to the unanimity requirement in tax law (...) it makes substantial tax-related provisions and directly interferes with national tax and budgetary sovereignty." That is the state speaking in its own bureaucratic dialect: one layer of authority warning another that it is reaching too far, too fast, and through the wrong legal channel.
Germany said the proposal should not be used to reopen an agreement reached during negotiations over the Energy Tax Directive. That earlier deal had deliberately given governments room to determine how electricity should be taxed and had removed electricity from the Commission's proposed environmental ranking of energy carriers. Germany said the new proposal would effectively bring that ranking back through the back door. Same game, different corridor.
The country said it shared the goal of transformation and electrification, but not the Commission's approach. The letter said: "We all share the goal of transformation and electrification. (...) I do not share the approach of the European Commission." Berlin's answer, at least on paper, is to scrap the proposal to tax gas higher than electricity as part of the electricity market design law and to negotiate electricity taxation under the proper EU law, the Energy Tax Directive.
Who Pays, Who Decides
Tom Lewis, energy policy coordinator at the NGO Climate Action Network Europe, said Germany should support the Commission's proposal to reform energy taxation to help close the price gap between electricity and gas. Lewis said: "Today, a German household pays on average over three times more per unit of electricity than it would for gas, making much-needed electrification, like installing heat pumps, less attractive than polluting gas boilers." The numbers are blunt. The politics around them are not.
Saverio Papa, head of energy at the European Heat Pump Association, said both energy taxation and network charges are key factors contributing to high electricity-to-gas price ratios in Europe. According to Commission figures, grid charges and taxes combined often outweigh the price of the electricity consumed. Network charges accounted for 27% of household electricity bills and 21% of business bills, while national taxes and levies added another 24% for households and 16% for firms. So the bill arrives padded by layers of public and private extraction, each one defended as necessary, rational, or unavoidable.
Finland and Sweden are the notable exceptions in the EU that tax gas higher than electricity. That detail sits there like a reminder that the rules are political, not natural. The market doesn't write itself. Governments do.
The Electoral Circus Rolls On
The EU co-legislators, the European Parliament and the Council, are set to kick-start negotiations on the sensitive file after the summer break, under the Irish EU Presidency. Another round of institutional choreography. Another file. Another negotiation. The same machinery keeps turning, with Brussels, national ministries, and lobby-backed NGOs all speaking the language of reform while ordinary people get the invoice.
Germany's complaint is framed as a defence of national sovereignty. The Commission's pitch is framed as a push for electrification. Between them sits the familiar architecture of EU power: legal instruments, qualified majorities, tax directives, market design, and the quiet assumption that decisions about energy, prices, and budgets belong to institutions far above the people who pay the bills. The language changes. The hierarchy doesn't.