Germany’s RWE, Europe’s fifth-largest utility, warned government plans to introduce a nuclear fuel tax in Germany would keep a lid on its earnings and dividends for years to come.

The statement makes RWE the first utility to detail the effects of a tax on the fuels of nuclear power stations, which Berlin plans to claw back profits that power providers made by charging customers for carbon certificates they got for free.

“If this plan were to be implemented, it would curtail our earnings power considerably,” RWE Chief Executive Juergen Grossmann said in a statement.

Germany’s 17 nuclear power stations, operated by the country’s four largest utilities – RWE, E.ON, Energie Baden-Wuerttemberg and Vattenfall – have become a focal point of energy policy in Europe’s largest economy.

Plans by the government to introduce a tax on uranium and plutonium, the plants’ fuel, have infuriated utilities. A finance ministry draft law obtained by Reuters shows the government expects to raise €2.3bn ($2.96bn) annually between 2011 and 2014 with the tax.

“The group now has to review its medium-term goals up to and including 2013,” RWE said.

The company has predicted that recurrent net income – net income adjusted for extraordinary effects and the basis for calculating the dividend – would rise five percent on average each year through 2013.

It also has promised that dividends would remain at least stable through 2013, and that it would seek to pay out 50-60 percent of its recurrent net income as dividends.

RWE would also lower investments in assets such as new power plants if the tax was introduced, which could crimp its ability to compete with the combined GDF Suez and International Power.

The “regulatory uncertainty remains (the) main challenge for the share,” said Landesbank Baden-Wuerttemberg analyst Bernhard Jeggle.

Still, the company reiterated that recurrent net income and operating earnings would climb about five percent this year.

One of the highest emitters of carbon dioxide in Europe and beset by regulatory uncertainty, RWE trades at 8.3 times forward earnings, according to Thomson Reuters StarMine.

That is a 28 percent discount to 18 peers such as Italy’s Enel and France’s EDF.

Germany’s nuclear power stations, amongst the utilities’ most profitable large-scale power plants, are slated to be closed in the mid-2020s. But parts of the German coalition government and the power providers are aiming to extend their lifespan, saying they want to share the extra profits.

An extension will be decided as part of a broader concept for the future energy supply of Germany. But the fact that the government has yet to decide on such a concept was creating even more uncertainty for RWE, the company said.