EU court finds German tax on nuclear fuel consistent with law

The Court Justice of the European Union (EU) ruled today on a case relating to Germany’s excise duty on nuclear fuel, which was brought by Emsland nuclear power station operator Kernkraftwerke Lippe-Ems, finding that the tax does not violate EU law.

The law, Kernbrennstoffsteuegesetz, was originally enacted in 2010 and created a duty of €145 for every gram of nuclear fuel used by nuclear plants, which was scheduled for enforcement from January 2011 to December 2016. The proceeds from the duty are to go towards offsetting the costs of rehabilitating the Asse II mining site, where the fuel’s radioactive waste is stored.

Kernkraftwerke Lippe-Ems, which is liable for €154 million due to the duty, brought suit with Germany’s Finanzgericht Hamburg (Hamburg Finance Court), which sought to clarify the duty’s legality under EU law with the court.

The Court of Justice found that the duty is not prohibited by any EU measures, rejecting several arguments including the idea that taxing the source of energy constitutes a tax on the energy product, which is banned by the EU. The ruling also established that suits concerning violations of state and EU law can be brought before the Court of Justice before the state courts make their rulings.