EU Approves German Industrial Electricity Price – Relief for Energy-Intensive Industry from 2026
Brussels / Berlin – The European Commission has approved Germany’s planned introduction of an industrial electricity price under EU state aid law. This allows the federal government to implement the support mechanism for energy-intensive companies as planned between 2026 and 2028.
Reduced Industrial Electricity Price for Selected Companies
Federal Minister for Economic Affairs and Energy Katherina Reiche described the approval as an “important signal” for industry. The measure is a key component in securing value creation and employment in Germany while supporting the transition toward climate-neutral production.
The industrial electricity price is intended to benefit companies in 91 electricity- and trade-intensive sectors, including chemicals, glass, rubber and plastics products, as well as parts of semiconductor manufacturing. According to the federal government, several thousand companies could benefit; additional sectors may be included at a later stage, subject to EU approval.
Industrial Electricity Price of 5 Euro Cents per Kilowatt-hour for Partial Consumption
Specifically, the instrument foresees that the state will cover part of electricity costs, resulting in an effective price of around 5 euro cents per kilowatt-hour for a limited share of eligible electricity consumption. This is not a fixed tariff, but a calculated subsidy mechanism: companies continue to purchase electricity at market prices but receive a state subsidy that partially offsets the difference to the target level.
In return, participating companies are expected to meet certain conditions. These include investments in energy efficiency and climate protection measures as well as transformation projects aimed at decarbonising production. The goal is to ensure that the relief not only reduces energy costs in the short term but also contributes to the long-term modernisation of industry.
The Federal Office for Economic Affairs and Export Control (BAFA) will oversee implementation and the application process. Applications are expected to be possible in 2027, retroactively for the year 2026.
EU Commission Adapts Framework for Industrial Electricity Support
At the same time, the European Commission is working on adjustments to the EU state aid framework for industrial support, the so-called Clean Industrial Deal State Aid Framework (CISAF). This sets out the conditions under which EU member states may provide financial support to their industries.
An update of these rules is planned, including provisions for energy-intensive sectors and state-backed electricity price relief schemes. Germany intends to actively contribute to this process in order to help shape the framework and ensure the long-term compatibility of national support instruments with EU state aid law.
Source: IWR Online, 21 May 2026
