State Aid - LNG terminal operator sues against competition
Operator of Germany's First Onshore Liquefied Natural Gas (LNG) Terminal in Stade, Lower Saxony, Files Suit Against State Subsidies for Planned Terminal in Brunsbüttel
The Hanseatic Energy Hub (HEH), operator of Germany's first onshore LNG terminal in Stade, Lower Saxony, is suing the European Commission at the EU Court in Luxembourg. The complaint alleges that the Brussels authority has approved state aid for the planned terminal in Brunsbüttel. Germany aims to use LNG to offset the loss of Russian gas supplies.
Plaintiff: State Funds Not Necessary for Brunsbüttel Project
HEH argues that the project could have been implemented without state funds. A normal market participant could have simply charged higher prices to customers and managed without state funds, according to HEH's lawyers. Furthermore, the support would incentivize operators to run less efficiently.
The Stade project is led by the consortium Hanseatic Energy Hub (HEH), based in Hamburg. HEH consists of the Hamburg-based logistics company Buss Group, the Swiss private equity firm Partners Group, the Spanish grid operator Enagás, and the US chemical company Dow. Construction of the Stade terminal officially began at the end of June, with operations expected to start in 2027.
Federal Government Involved with Millions
The European Commission allowed the German government in July 2023 to support the Brunsbüttel terminal with state aid of 40 million euros. This amount does not correspond to investment costs but is linked to return calculations and was thus calculated by the EU Commission, the Federal Ministry of Economics explained.
However, the federal government is involved with significantly more money. According to a letter from the Finance Ministry to the Budget Committee of the Bundestag in April 2022, around 740 million euros were earmarked in the 2022 budget. The federal government holds a 50% stake in the company German LNG, responsible for the Brunsbüttel terminal, through the development bank KfW.
Suit Filed at EU Court
The suit was filed following the EU Commission's July 2023 decision to approve state aid.
HEH believes that the Brunsbüttel terminal project could have been financially sustainable without the need for state subsidies, as they argue that higher prices for customers could have covered the project's costs. Additionally, the provision of state funds might encourage operators to operate less efficiently in the long term.
