How much royalties are paid for hydrocarbon and lignite explorations in Germany?

The Federal Mining Act (Bundesberggesetz, BBergG) was introduced to govern the use of the German subsurface. By paying royalties, companies obtain permissions to exploit resources in Germany. However, there is no transparent reporting on the paid royalties yet. Hence, the objective of this study is to provide an overview of the ownership and paid royalties. Furthermore, we discuss the sustainable use and management of the German subsurface. Our study shows that the subsurface is partly state- and also company-owned. Lignite, for example, is privately owned. In contrast, hydrocarbons are state-owned. In 2017, for example, on average 13% was paid in royalties for gas and 11% for petroleum. These paid royalties however have minor impacts on state budgets. For instance, in Lower Saxony, the royalties amount to 189 million Euro or 0.6% of the state budget. Thus, state income from royalties is negligible small. However, local communities and property owners have no financial benefits, but can be socially and environmentally impacted. In other countries such as the USA, paid royalties are much more transparent and also landowners directly obtain royalties. For example, in the US states, Texas and Louisiana, private landowners get paid 25% royalties on resources extracted from their land. In Germany, the subsurface is also crucial for our energy transition (“Energiewende”) as the subsurface is gradually used to extract and store energy. Thus, we propose to adapt the current Federal Mining Act to also account for environmental and social impacts providing a sustainable use and management of the subsurface.