Federal Cabinet approves Act on Continued Liability for Nuclear Decommissioning and Disposal Costs and Commission for Review of Financing of Nuclear Phase Out

Today the Federal Cabinet approved the “Act on Continued Liability for Nuclear Decommissioning and Disposal Costs”. Further it also approved the establishment of a “Commission for the review of the financing of the nuclear phase out” (Kommission zur Überprüfung der Finanzierung des Kernenergieausstiegs (KFK).

1. Act on Continued Liability for Nuclear Decommissioning and Disposal Costs

As previously reported, the aim of this act is to ensure continuing and in particular create new liability for the costs of Germany’s staggered nuclear power exit until 2022 and the follow-up costs.

With this act the ultimate parent in groups that currently operate nuclear power plants in Germany (E.ON SE, RWE AG, EnBW AG and Vattenfall AB are specifically named) shall become also liable for the liabilities of the actual nuclear power operating companies.

The Federal Minister of Economics Gabriel said that with this law existing liability loopholes will be closed as the parent company will be held liable for the long-term for the liabilities of their affiliates for decommissioning and disposal obligations.

Unlike the previous draft, today’s bill no longer tries to present the whole concept as a “conservation” of the current liability regime. It admit that the aim is to create new provisions on long term liability of companies that control nuclear power operating companies.  Legally speaking, the proposal goes above and beyond the existing liability regime by establishing a new, independent general liability regime for companies that directly or indirectly potentially control nuclear power operating companies. It is also meant to apply to companies that currently are not liable for liabilities of its subsidiary. In a nutshell, the bill does away with basically any limitation for nuclear power decommissioning, dismantling and disposal obligations from the operating company upwards. The new regime would create a new class of “toxic shareholding”, where a broadly defined concept of “control” over a nuclear power operator would create liability up to the ultimate parent, also outside of Germany. It will also be interesting to see what position the state of Baden-Württemberg – as ultimate parent of EnBW – will ultimately take on this.

2. Commission for the Review of the Financing of the Nuclear Phase Out

Today also a commission for the review of the financing of the nuclear phase out was established. On behalf of the Federal Government the commission shall examine and work out recommendations on how the financing of the decommissioning of nuclear power plants and the disposal of radioactive waste can be configured, so that the responsible companies are economically able to fulfill their obligations in the long-term.

This commission is led by three persons of the three major parties in Germany: Matthias Platzeck (prime minister of Brandenburg, SPD), Ole von Beust (former mayor of Hamburg, CDU), Jürgen Trittin (former  Federal Minister of Environment, Die Grünen).

A first basis for the work of the commission shall be the expert opinion on the examination of the provisions made by companies supplying nuclear energy, which was prepared by the auditing company Warth & Klein Grant Thornton AG. The Federal Minister of Economics Gabriel presented the results of this examination on 10 October 2015. He said that the stress test has shown that the companies concerned have made sufficient provisions to cover all of the costs. The €38.3 billion in provisions made by the companies is within the various scenarios that were examined by the experts.

The commission shall give its recommendation until the end of January 2016.

Sources: Press release BMWi; BMWi – Further information about the commission

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