The EU Commission has made it possible for German industry to receive greater relief regarding electricity costs than originally planned. According to Federal Minister for Economic Affairs Katherina Reiche (CDU), this development places additional strain on the federal budget. Consequently, it is urgently necessary to allocate supplementary funds. The successful negotiation in Brussels for an industrial electricity price requires an additional budget of approximately one billion euros, which Reiche stated must be made available.
The reason for this additional required funding lies in a breakthrough by the Ministry of Economic Affairs: they have managed to enable the cumulative application of the industrial electricity price and the electricity price compensation starting in 2026. Previously, EU law strictly prohibited the simultaneous use of these two instruments, even though the price compensation had already been offering companies relief from CO2 costs. However, the Commission agreed to allow this new setup, following the Ministry’s argument that this measure is essential given the exceptionally high energy prices during the current crisis.
Minister Reiche’s remarks come as the federal budget negotiations are underway, in which Finance Minister Lars Klingbeil (SPD) faces the challenge of closing a multi-billion-euro fiscal gap. Regarding the electricity subsidies, Reiche warned that any cutbacks would damage not only the industry but also jobs in Germany. She stressed that, “in the current climate, no one wants that,” calling potential cuts a “direct threat to our competitiveness.”
