Payout costs

Fallout Hits After Nuclear Tax Ruling

Nuclear Power Station Operated By RWE AG Germany’s Largest Power Generator
Germany's nuclear power plants are all due to close by 2022. Source: Bloomberg

Germany’s nuclear future had looked set in stone. After months of deliberations, last year a deal was agreed by the government and power companies to phase out atomic power by 2022. The big utilities firms – E.ON, RWE, EnBW and Vattenfall – would pay €24 billion ($27 billion) into a public decommissioning fund and, in return, the government would take responsibility for the interim storage and final disposal of nuclear waste.

It was a bitter pill for the power firms, and they went looking for ways of recouping some of their cash. They sued the government over a nuclear-fuel tax that was part of the deal, arguing it was unconstitutional. Now their tenacity has paid off.

The Federal Constitutional Court on Wednesday declared the nuclear fuel tax incompatible with the German constitution and therefore invalid. E.ON, RWE, EnBW and Vattenfall will receive a refund of €7 billion from the state, which includes 6 percent interest.

“The verdict is a pleasant surprise,” said an industry representative on Wednesday. “It is one of the few judgments that has been positive for us in the last decade.”

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.