The European Commission has approved the German government's plans for an industrial electricity price subsidy. Germany may subsidize the electricity costs of energy-intensive companies retroactively from January 1, 2026 until the end of 2028, as the Commission announced on Thursday. A total of €3.8 billion is earmarked for the subsidies, according to the announcement. Federal Finance Minister Lars Klingbeil (SPD) welcomed the move as "very good news for German industry".
With the industrial electricity price, the federal government aims to cap the electricity price that companies ultimately pay, financing the difference to the market price. According to the EU Commission, the reduced electricity price for companies must be at least €50 per megawatt hour. Additionally, companies are required to invest at least half of the savings into more climate-friendly production.
The funds are available to companies in sectors "where there is a significant risk that they will relocate their activities to countries outside the EU," the Commission further stated. In Germany, these are primarily the steel, cement, and chemical industries. Companies can apply for the state aid at the end of each year, with subsidies then depending on their actual consumption and average electricity prices.
The black-red coalition had already agreed in principle on the industrial electricity price in November, long before the Iran war drove energy prices higher. The green light from Brussels was still pending, as was a final agreement within the black-red coalition. According to media reports, the details primarily concerned the question of which projects subsidized companies must reinvest the received state aid into.
"We are achieving tangible relief in energy costs," Finance Minister Klingbeil now declared. With the industrial electricity price, German industry will become "more internationally competitive," while also protecting jobs in Germany.
His party colleague, Federal Environment Minister Carsten Schneider, stated that energy in Germany will "step by step come increasingly from renewable sources, because that is the most sustainable and cheapest form of energy." The industrial electricity price is "an instrument that can facilitate the transition to future technologies."
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