EU aide OKs nuclear-fuel tax

An opinion released Tuesday by an adviser to the EU's highest court dimmed the hopes held out by Germany's biggest utilities companies of overturning a tax levied on nuclear fuel since 2011.

Advocate General Maciej Szpunar of the EU Court of Justice said in his non-binding opinion that the German nuclear-fuel tax doesn't violate EU rules on creating taxes on electricity. He also dismissed claims that the tax violated EU state aid regulations.

The Luxembourg court is widely expected follow the adviser's recommendations, when it hands down its ruling in four to six months. This comes after finance courts in Hamburg and Munich had expressed doubts about the constitutionality of the tax and referred the case to the EU high court.

Nuclear U-turn

German energy giants RWE, E.ON and EnBW had lodged the complaint following the Berlin's decision to introduce the tax at the beginning of 2011. The companies argued that the levy violated EU law, adding that they had had to cut thousands of jobs in the face of competition from subsidized clean-energy sources.

E.ON says it has so far paid 2.3 billion euros in taxes, with RWE putting the bill at 1.23 billion euros followed by EnBW's 1.1 billion euros.

The tax was expected to raise more than 2 billion euros ($2.3 billion) in annual revenues and was part of Chancellor Angela Merkel's plan to extend the lives of the country's then 17 operating nuclear reactors, meant to be phased out during the 2030s. But after the Fukushima power plant disaster in March of that year, Merkel decided to speed up the phase-out and ordered the immediate shutdown of eight of the reactors.

Tuesday's opinion sent E.ON shares nose-diving by as much as 5.5 percent, while RWE share fell as much as 6.9 percent.

pad/hg (AFP, Reuters)