German finance minister backs early end to green energy levy

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Cranes lift up the rotor of a giant wind generator in Brunsbuettel about 60 km north-west of the northern German city of Hamburg October 1, 2004. REUTERS/Christian Charisius/File Photo

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BERLIN, Jan 30 (Reuters) - Germany may scrap a levy on electricity bills that is used to support renewable power from the second half of the year, to ease the strain of rising energy costs on households, Finance Minister Christian Lindner was quoted as saying on Sunday.

Germany's three ruling parties had planned to abolish the EEG surcharge on electricity bills from Jan. 1, 2023, but Chancellor Olaf Scholz may have to act sooner given the surge in costs.

Energy prices in Germany in December were up 69% compared with December 2020. Any military action in Ukraine by gas supplier Russia would be likely to push them even higher.

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"If the coalition agrees on it, I would make it financially viable and the EEG surcharge would be removed mid-year," Lindner was quoted as saying by Der Spiegel magazine. "This would equate to billions in relief for families, pensioners and people on social benefits, as well as medium and small companies and craftspeople."

The surcharge was cut by 43% from Jan. 1 but is still expected to cost households an average 222 euros ($247.37) this year.

Earlier this month, the co-leader of Germany's Social Democrat (SPD) party said the charge may be scrapped altogether this year. Scholz's SPD govern with Lindner's pro-business Free Democrats (FDP) and the ecologist Greens.

A Finance Ministry spokeswoman said on Sunday she couldn't give any details about how talks between the three parties on scrapping the levy were progressing.

Some 4.2 million German households will see their electricity bills rise by an average 63.7% this year while 3.6 million face gas bills 62.3% higher than in 2021 as suppliers pass on record wholesale costs, industry data suggests.

($1 = 0.8974 euros)

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Reporting by Christian Ruettger Writing by Joseph Nasr; editing by Barbara Lewis and Raissa Kasolowsky

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