Oil & Gas

25 Jul 2022

German Government ‘Likely to Face Legal Challenges to Gas Rationing’

25 Jul 2022  by   

Image: max.ku / Shutterstock

The German Government has been warned that it might face legal action over its potential decision to implement gas rationing measures.

A few days ago, President of the European Commission Ursula von der Leyen did not rule out the possible scenario of complete interruption of Russian natural gas to European countries.

Last month, Germany’s Federal Minister of Economics and Climate Protection, Robert Habeck, declared the government was implementing the second level of the country’s gas emergency plan.

The move came as the amount of gas flowing through Nord Stream 1, the pipeline that carries a third of the EU’s gas supply from Russia, dipped to 40% of normal levels.

Analysts suggest the German Government will step in implementing non-market-based measures if it triggers stage three “emergency phase”.

In this phase, the German network regulator, the Bundesnetzagentur (BNetzA), will intervene to ensure delivery of “vital demand for gas with special consideration of protected customers and minimising consequential damage”.

Dennis Hillemann, an Administrative Law Partner at Fieldfisher Hamburg, said: “For German businesses, especially those in its industrial heartlands, the rationing of gas supply is a nightmare scenario.

“Faced with existentially-threatening restrictions on gas supply, it seems unlikely German businesses will take BNetzA’s decisions lying down.

“There is currently no legally binding, detailed action plan from the BNetzA on how gas would be distributed among German market participants in the event of a shortage.

“BNetzA has made it clear it intends to make broad rulings on gas supply, covering whole industries as opposed to individual companies.

“Many businesses will feel this course of action will cause damage that could have been avoided with more extensive data determination and impact modelling by the BNetzA. As such, its decisions may become the target for possible administrative court proceedings.”


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