BERLIN (dpa-AFX) - Energy-intensive companies in Germany are set to receive relief starting in 2026 through a state-subsidized industrial electricity price. Federal Minister for Economic Affairs Katherina Reiche (CDU) stated in Berlin: "I expect that we will introduce the industrial electricity price on January 1, 2026."
Shortly before the "Steel Summit" with Chancellor Friedrich Merz (CDU) on Thursday, Reiche announced further relief for companies with high electricity consumption. This concerns an extension of the so-called electricity price compensation. IG Metall warned that without competitive energy prices, tens of thousands of jobs could be at risk.
Industrial Electricity Price Set for 2026
Companies in Germany have long complained about high electricity prices compared to international standards, arguing that this makes them uncompetitive. An industrial electricity price has been under political debate for years. The federal government now intends to act. Reiche said negotiations with the EU Commission were in their final stages. The Commission's approval is required as this constitutes state aid.
Speaking at an industrial conference with other EU ministers on the industrial electricity price, Reiche said that budget funds should be applied retroactively in 2027. An agreement with the EU Commission stipulates that companies' proof of increased investments in efficiency, in return for the industrial electricity price, should involve as little bureaucracy as possible.
Brussels had generally given the green light for an industrial electricity price in June. At the time, it was stated that a discount of up to 50 percent on the wholesale electricity price would be permitted, but only for up to half of a company's annual electricity consumption. Subsidies may only be granted for a maximum of three years per company and must end by the close of 2030 at the latest.
Details Still Unclear
The exact structure of the industrial electricity price remains open. In an earlier ministry paper, a price of 5 euro cents per kilowatt hour was mentioned.
According to the Federal Association of Energy and Water Industries, as of early October, the average electricity price for new contracts for small and medium-sized industrial companies is currently up to 18 euro cents per kilowatt hour, with companies with higher consumption paying somewhat less.
The state subsidy is expected to cost billions. The money could come from the Climate and Transformation Fund, a special federal fund. According to a concept by an alliance led by the federally owned German Energy Agency, as cited by "Handelsblatt," an industrial electricity price of five cents for around 2,000 companies would cost the federal government 1.5 billion euros per year.
Further Relief Measures
The industrial electricity price is a key component for the competitiveness of the steel sector, Reiche said with regard to the "Steel Summit." She described extending the so-called electricity price compensation beyond 2030 as even more important. Positive signals from the Commission on this issue have been received, and a decision is expected in the coming weeks.
With electricity price compensation, companies are indirectly relieved from costs arising from CO 2 emissions trading. Additional relief on grid fees is also already underway.
IG Metall and BDI Welcome Industrial Electricity Price
"It is an important signal that the Minister for Economic Affairs has clearly committed to the industrial electricity price and is considering its prompt introduction," said Jürgen Kerner, Deputy Chairman of IG Metall. There is no alternative to the industrial electricity price if Germany is to remain an industrial nation. However, it should not be a "blank check," but must be linked to job security, collective bargaining agreements, and future investments.
The Federation of German Industries (BDI) also expressed support. "For particularly energy-intensive industries, any rapid relief from high electricity costs is essential to remain internationally competitive in the short term," said Deputy Director General Holger Losch.
An industrial electricity price would send an important signal to energy-intensive industries in Germany. However, strict EU Commission requirements significantly limit the relief effect. Beyond the industrial electricity price, structural reforms in the energy system are necessary to ensure long-term competitiveness, Losch emphasized.
Klingbeil Calls for End to All Steel Imports from Russia
On Thursday, Chancellor Merz plans to discuss the difficult situation of the steel industry with Reiche, other ministers, and representatives from the steel sector. The industry is burdened by cheap imports from China, high costs for transitioning to climate-friendly steel production, and high energy prices.
Vice Chancellor Lars Klingbeil is calling for tougher measures against Russia. "There must quickly be a complete end to all steel imports from Russia," the SPD politician told Deutsche Presse-Agentur. "Steel slabs produced in Russia and further processed in the EU are still exempt from sanctions." Steel slabs are a precursor material for sheets and strips. The EU Commission announced protective measures for the domestic steel industry in early October./hoe/DP/nas
