After two legal rejections Germany’s nuclear fuel tax has been supported by a regional court in the latest episode of a complex legal battle that looks set to continue for years.
A tax on nuclear fuel came as part of the 2010 deal to ‘extend’ the lives of Germany’s nuclear power plants, but the government insisted on the fuel tax even after it decided to scrap the extension. Eight units were also ordered to close down immediately. The unilateral moves came within days of the onset of crisis at Fukushima Daiichi following the natural disasters of 11 March 2011.
All four the utilities are contesting the arrangements. EOn, RWE and EnBW petitioned the financial courts in the capitals of their home states to get back the tax they had paid for fuel that now sits unused in shutdown reactors. They were successful and were repaid, although the federal government appealed the decision and this awaits a hearing in the Federal Court.
The cases brought by EOn and RWE also contested the government order to shut down their reactors as a violation of their ownership of power generation rights. They added that the fuel tax was conditional on extended operation, which had been cancelled unilaterally and overnight by government. In this context the financial courts of Hamburg and Munich respectively agreed that the tax was unconstitutional and probably against European Union law.
EnBW, however, is 45% owned by the Green-governed state of Baden-Wurttemburg and opted not to contest the shutdown order. Its case against the fuel tax was rejected by the Stuttgart financial court yesterday. The company has not stated whether it will appeal the decision and take the case to the Federal Court, but the governmental appeals of EOn and RWE’s victories ensure that court’s re-examination of their cases. Beyond that there remain the options of Germany’s Constitutional Court and also the European Court of Justice.
Owned by the Swedish state, Vattenfall is taking a different route. It never had to directly pay the fuel tax due to a combination of outages and ownership structures for the three German reactors in which it holds stakes. Instead, Vattenfall is contesting the confiscation of generation rights for the Brunsbuttel and Krummel nuclear power plants and doing so under international law, which affords it additional protection. The company has said simply that it expects full compensation for its costs, which it noted as SEK10 billion ($1.5 billion) for the first half of 2011.
RWE’s first-half results for 2011 counted some €200 million ($273 million) in fuel taxes as part of the €900 million ($1.23 billion) the policy change has cost it so far. EnBW explained the tax would cost it over €100 million ($126 million) per year.
For its part, EOn warned shareholders of massive losses and cuts of up to 11,000 jobs. “Obviously we’re taking legal action against the nuclear fuel tax, which we believe is unlawful. And obviously we’ll quantify the financial damage caused by the early shutdown of our nuclear power stations and present these figures to Germany’s political leadership,” said CEO Johannes Teyssen in May 2011.