The Czech government is considering higher taxes on energy producers including CEZ and E.ON to finance an expected rise in renewable energy subsidies next year, Mlada Fronta Dnes reported, citing Prime Minister Petr Necas. The government is also discussing other measures such as imposing a higher environmental tax on coal and gas producers, the newspaper said. Our view: According to local newswires, a tax rate of 25% instead of the current 19% is being considered for CEZ. Although the total contribution of solar to net profit is only ca. 1%, market reaction should be negative. The same applies for NWR. Although it is difficult to forecast the potential impact of higher environmental tax on coal producers like NWR, the news should spark negative market reaction.