Taxing times for renewables

From April 1, power from renewables will be subjected to an electricity tax of DEM 0.02/kW being introduced by the new Social Democrat/Green government. Under EU market rules, renewables may not be exempted from the tax as this would cause market distortions when trading across borders. Apparently it is techically impossible to prove that power is "green" once it is part of the import/export mix, ruling out an across the board exemption for all renewables in Europe. According to a government source, there are future plans for the proceeds of the tax on renewables to go into a special renewables support fund, though the figure of DEM 300-400 million reported in the press is unrealistically high. The fund is not imminent. The Green party is not happy with the mechanism because of the cost of administering it, but says there may be no other choice. It seems there is little hope that those buying renewables power would get the tax reimbursed from any future fund.

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