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Court rules that Germany's nuclear tax is illegal

A selection of Germany's nuclear power plants Image copyright Reuters
Image caption Germany's nuclear power plants

Germany's energy utilities look set to receive refunds of billions of euros after the government's tax on their use of nuclear fuel rods was declared illegal by the country's top court.

Between 2011 and 2016, nuclear power operators made payments of more than 6bn euros (£5.2bn) to the government.

The Constitutional Court has ruled the tax was "unconstitutional and void".

E.On, RWE and EnBW have been hit hard by Chancellor Angela Merkel's decision to abandon nuclear power by 2022.

The policy was drawn up following the disaster at Fukushima in Japan in March 2011.

Germany's environment minister Barbara Hendricks said that the court ruling was a "colossal irritation".

Ms Hendricks is a member of the Social Democrats (SPD), who are the junior partner in Chancellor Merkel's governing coalition.

She said the 2009-2013 government, which was made up of Mrs Merkel's conservatives and the Free Democrats (FDP), had caused "chaos" in nuclear policy.

"The fact that this bodge [referring to the previous government's decision] means a payout to the nuclear power companies years later makes the Constitutional Court's ruling a colossal irritation," Ms Hendricks said.

The verdict overrules a decision by the European Court of Justice last year saying the tax did not breach European Union laws.

Second victory

The decision marks a second victory for energy utilities challenging Germany's nuclear policy.

Last December, another court ruled that shutting down all the country's plants violated their rights.

E.ON said Wednesday's ruling meant it could claim a refund of 2.85bn euros plus interest of 450m euros, boosting its share price.

RWE expects a refund of 1.7bn euros in addition to about 200m euros in interest payments.

In the aftermath of Fukishima, E.On and RWE separated their conventional power plant businesses from operations such as renewables.

The fuel rod tax required firms to pay 145 euros per gramme of nuclear fuel each time they exchanged a fuel rod, which usually happens about twice a year.

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