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24 April 2026
Publication series – 3 of 82 Insights
Industrial electricity price: Approval by the European Commission (as of April 2026)
- Briefing
Persistently high energy prices continue to pose significant economic challenges for energy-intensive industrial companies. Against this backdrop, the German government aims to provide temporary relief by introducing an industrial electricity price. In early 2026, the Federal Ministry for Economic Affairs and Energy (BMWE) presented the first draft of a funding guideline and submitted it to industry associations for consultation.
With the approval of the European Commission in April 2026, the German government has only secured the necessary approval under EU state aid law to provide relief to energy-intensive companies through state subsidies on electricity prices, with retroactive effect from 1 January 2026 until the end of 2028. The total volume of the measure amounts to €3.8 billion.
Regulatory basis and state aid framework
The industrial electricity price is embedded within the EU legal framework for state aid. The decisive document is the ‘Clean Industrial Deal State Aid Framework’ (CISAF), published in July 2025, which applies until the end of 2030 and, under certain conditions, permits electricity price relief for energy-intensive companies.
Under the CISAF guidelines, a reduction in the electricity price of up to 50% of the wholesale price is permitted, but only for a maximum of 50% of a company’s annual electricity consumption. Furthermore, the reduced electricity price must not fall below a lower limit of 50 EUR/MWh.
These state aid limits have a significant influence on the structure of the German industrial electricity price. The European Commission has now approved the German scheme in accordance with these requirements.
Support mechanism and structure
The industrial electricity price is structured as a difference subsidy. Companies receive a discount (up to 50%) on half of their electricity consumption, calculated on the basis of a reference price. The reference price is in turn determined on the basis of the previous year’s electricity prices. The lower limit is 5 cents per kilowatt-hour, which corresponds to the value provided for in the draft subsidy guideline. The specific amount of the subsidy depends on actual electricity consumption and the applicable market prices at the time and is paid out retrospectively. In concrete terms, this means that with a (notional) reference price of 8.75 ct/kWh, the relief amounts to approximately 3.75 ct/kWh for 50% of electricity consumption (considering the price lower limit of 5 ct/kWh).
Eligible companies
Under the EU guidelines in the CISAF, companies at risk of relocating operations to locations outside the EU where environmental regulations are less stringent may benefit. In the view of the European Commission, this particularly affects electricity-intensive companies facing international competition. In any case, companies with a significant risk of relocation whose main area of activity is covered by the list in Annex 1 (so-called Partial List 1) of the Guidelines on State Aid for Climate, Environmental Protection and Energy (‘KUEBLL’) are to be eligible for support (see CISAF, Section 4.5.2.). On 16 April 2026, the BMWE announced that, in consultation with the EU, relief could also be provided to sectors not covered by the KUEBLL list (e.g. the metalworking industry, mineral raw materials and food processing). However, this is subject to the condition that these industries are particularly at risk of relocating to non-EU countries due to their electricity consumption or the openness of their business model to trade.
The EU legal framework does not preclude a national funding scheme under which specific operational or business units may also be eligible for funding if their main area of activity is covered by the list in Annex 1 of the KUEBLL. In any case, the BMWE restricts the circle of grant recipients in the first draft of the funding guidelines, although this is not strictly required under EU law: companies must demonstrate that both the applicant (legal entity) and the relevant point of delivery are covered by the list in Annex 1 of the KUEBLL.
Funding conditions and contribution to decarbonisation
A key prerequisite for claiming the funding is the obligation to reinvest a portion of the aid received.
Under EU law, companies must use at least 50% of the funding received for investments in decarbonisation or efficiency improvements.
According to the draft funding guidelines issued by the Federal Ministry for Economic Affairs and Energy (BMWE), the following measures are eligible as contributions to decarbonisation:
- Development of renewable energy (RE) generation capacity.
- Energy storage solutions.
- Measures to increase demand-side flexibility.
- Energy efficiency improvements that have an impact on electricity demand.
- The development of electrolysers for the production of renewable or low-carbon hydrogen.
- Investments focused on electrification.
- Infrastructure modernisations or expansions, such as grid connections, for example the renewal of on-site or in-plant distribution networks.
- Costs for the integration of electricity from new or modernised renewable energy plants, as well as the payment of construction cost subsidies, for example to expand connection capacity.
- Costs arising from the procurement of electricity through newly concluded Power Purchase Agreements (PPAs), including those implemented by third parties, provided these finance new or modernised renewable energy plants.
It should be noted that the decarbonisation measures must be implemented in Germany and that only those measures commenced after the application has been submitted will be recognised.
Breaches of funding conditions – for example regarding earmarking or sector affiliation – may lead to the full or partial recovery of the funds granted.
Restrictions and interactions with other funding instruments
Of interest to energy-intensive companies is that, from a state aid perspective, a (possibly partial) cumulation of the industrial electricity price with other subsidies may be possible, provided that such cumulation does not result in the respective maximum aid intensities or maximum aid amounts being exceeded.
On 16 April 2026, the BMWE confirmed that combining the industrial electricity price with electricity price compensation across different supply points/production sites is permissible. However, it should be noted that the target price of EUR 0.05/kWh applied to half of the annual electricity consumption represents the maximum compensation permitted under state aid law and that this limit must not be exceeded.
Support from Taylor Wessing
The design and implementation of the industrial electricity price operate within the tension between national subsidy law and European state aid law and remain subject to ongoing clarification. Against this background, it is crucial for companies to structure their use of the scheme in a legally sound manner and to ensure compliance with all eligibility requirements – particularly with regard to sector affiliation, investment obligations and earmarking – throughout the entire funding period, in order to avoid recovery risks. Taylor Wessing provides comprehensive advice at the interface of energy law and EU state aid law and supports companies throughout the entire funding process – from assessing eligibility and submitting legally sound applications through to implementation and verification of expenditure, as well as ongoing monitoring of regulatory developments.
In this series
Geothermal Energy in Germany: technology, current status and the legal framework for the heat transition
24 April 2026
by Multiple authors
Industrial electricity price: Approval by the European Commission (as of April 2026)
24 April 2026
by Johannes Schaadt-Wambach, LL.M. (Prag), Dr. Markus Böhme, LL.M. (Nottingham)
EEG 2027 – Overview of the Planned Amendment to the Renewable Energy Sources Act
10 March 2026
by Dr. Markus Böhme, LL.M. (Nottingham), Dr. Christian Ertel
The NIS2 Directive: Challenges Renewable Energy Companies
18 February 2026
EU specifies certification of permanent CO₂ removals
11 February 2026
by Dr. Janina Pochhammer, Dr. Niels L. Lange, LL.M. (Stellenbosch)
Electricity Tax Amendment 2025/2026: New rules for BESS, charging infrastructure and renewable energies
14 January 2026
Battery storage systems in outdoor areas - current classification in accordance with § 35 BauGB
19 December 2025
HR compliance in the energy sector – customs authorities step up the fight against sham-employment
15 December 2025
The Current Challenges for Offshore Wind Energy in Germany
2 December 2025
by Multiple authors
Offshore wind in Germany: from market premiums to Contracts for Difference?
28 November 2025
by Multiple authors
Energy Sharing under Section 42 of the German Energy Industry Act (EnWG)
26 November 2025
Bundestag Decides on the Privileging of Battery Storage Facilities in Outdoor Areas under § 35 (1) BauGB
12 November 2025
Industrial electricity price: Initial assessment and opportunities for companies
21 November 2025
by Dr. Markus Böhme, LL.M. (Nottingham), Johannes Schaadt-Wambach, LL.M. (Prag)
FIDIC – An introduction to the FIDIC Suite 2017
22 October 2025
by Multiple authors
The Renewable Energy Expansion Acceleration Act – a boost for the energy transition in Austria?
23 September 2025
Federal Network Agency discussion paper on reforming grid fees for industry and commerce
25 September 2025
by Multiple authors
German-Dutch Treaty on Cross-Border Energy Projects
18 September 2025
by Multiple authors
Energy communities in Austria and the new Electricity Industry Act (ElWG)
15 September 2025
New amendment to the Energy Industry Act (EnWG) introduced in July and August 2025
8 September 2025
Clean Industrial Deal State Aid Framework (CISAF) – a new state aid framework for the green transformation of industry
8 September 2025
by Dr. Michael Brüggemann, Johannes Schaadt-Wambach, LL.M. (Prag)
Industrial electricity prices: initial assessment and opportunities for businesses
18 August 2025
by Johannes Schaadt-Wambach, LL.M. (Prag), Dr. Markus Böhme, LL.M. (Nottingham)
Regulatory Framework for Transmission System Operators in Germany
18 August 2025
by Multiple authors
Court ruling on the effectiveness of availability guarantees for wind turbines
31 July 2025
New Legal Framework for the Commercial Use of Carbon Capture and Storage (CCS) and Carbon Capture and Utilisation (CCU)
11 July 2025
by Multiple authors
Are offshore wind converter platforms a bottleneck in the energy transition? New German government wants to create production capacities at German shipyards
17 June 2025
by Multiple authors
Speeding up the energy transition - the new German government’s plans for gas and steam power plants and its quest for the right technology for renewable energy
8 May 2025
by Multiple authors
Update - Change of government opens the door to carbon capture and storage and carbon capture and utilisation
17 April 2025
by Multiple authors
The special fund for infrastructure and climate protection - what is next?
10 April 2025
by Multiple authors
Changes to CBAM through Omnibus legislative package
10 April 2025
The role of heat probes in the energy transition: Authorisation procedures and potential
26 March 2025
CJEU judgement on customer installations in accordance with Section 3 No. 24a Law on the Energy Industry EnWG
26 March 2025
by Dr. Markus Böhme, LL.M. (Nottingham), Dr. Christian Ertel
Will the new German government open the door for carbon capture and storage?
26 February 2025
by Multiple authors
Waste heat from data centres - new reporting obligations under the EnEfG
6 February 2025
by Multiple authors
Oman and Belgium Sign Landmark MoU on Green Hydrogen Cooperation
11 December 2024
Decision day: Grid fee exemption in customer systems and energy price brake put to the test
28 November 2024
by Dr. Christian Ertel, Dr. Markus Böhme, LL.M. (Nottingham)
Hydrogen core network - The Federal Network Agency’s strategy for the energy transition
11 November 2024
by Multiple authors
Amendment to the Energy Industry Act: changes for energy supply companies and grid and system operators
18 September 2024
by Dr. Christian Ertel, Dr. Markus Böhme, LL.M. (Nottingham)
Standard Essential Patents: A new challenge for the IoT and smart meter world
10 September 2024
Land acquisition and data protection: The importance of the GDPR when project developers request owner data
18 July 2024
by Dr. Patrick Vincent Zurheide, LL.M. (Aberdeen), Dr. Julia Wulff
Municipalities to share profit in wind turbines and ground-mounted photovoltaic systems
11 July 2024
Solar Package I - Overview of Changes to Ground-Mounted and Building-Mounted PV Systems
27 May 2024
Mandatory special charge for open space photovoltaic systems in Brandenburg
21 February 2024
A new era for wind energy investments in Hungary
Power Play: Renewable Energy Update
26 January 2024
Updating the National Hydrogen Strategy
6 November 2023
by Dr. Niels L. Lange, LL.M. (Stellenbosch), Dr. Janina Pochhammer
The new CO2 border adjustment mechanism (Carbon Border Adjustment Mechanism - “CBAM”) - first statutory reporting obligations set for January 2024
Power Play: Renewable Energy Update
3 November 2023
New IT security requirements for the energy sector
Power Play: Renewable Energy Update
1 September 2023
by Dr. Paul Voigt, Lic. en Derecho, CIPP/E, Alexander Schmalenberger, LL.B.
Does monument protection hinder the expansion of renewable energies?
Power Play: Renewable Energy Update
16 August 2023
The amending law to strengthen digitisation in the urban land use planning process and the further expansion of renewable energies
Power Play: Renewable Energy Update
6 July 2023
Challenges for data center operators - The federal government’s draft bill for an energy efficiency act
Power Play: Renewable Energy Update
12 April 2023
by Multiple authors
The Energy Charter Treaty in the Light of the Electricity Price Brake: An opportunity for investors to litigate?
27 January 2023
Ordinance for Determining Critical Infrastructures (KritisV): Renewable energy plants as critical infrastructure and requirements for IT protection
Power Play: Renewable Energy Update
12 July 2022
by Dr. Paul Voigt, Lic. en Derecho, CIPP/E, Dr. Markus Böhme, LL.M. (Nottingham)
Liquefied Natural Gas Projects in Germany: The LNG Acceleration Act
Q&A series: Energy & Infrastructure
10 June 2022
Participation of local municipalities in the context of wind and photovoltaic projects
Power Play: Renewable Energy Update
5 May 2022
Renewable Energy Wrap-Up – France
Power Play: Renewable Energy Update
27 April 2022
Renewable Energy Wrap-Up - United Kingdom
Power Play: Renewable Energy Update
15 March 2022
Building energy performance: the revised Energy Performance of Buildings Directive
Power Play: Renewable Energy Update
14 February 2022
Fit for 55 – Hydrogen and the Reform of the European Gas Market
Power Play: Renewable Energy Update
11 January 2022
Renewable Energy Wrap-Up – Netherlands
Power Play: Renewable Energy Update
2 December 2021
Renewable Energy Wrap-Up – Poland
Power Play: Renewable Energy Update
21 September 2021
by Olav Nemling
Renewable Energy Wrap-Up – Austria
Power Play: Renewable Energy Update
18 August 2021
Renewable Energy Wrap-Up - Germany
Power Play: Renewable Energy Update
12 July 2021
Floating Foundations for Offshore Wind Farms
Power Play: Renewable Energy Update
8 June 2021
Species protection exemption: Significance for wind energy
Power Play: Renewable Energy Update
25 May 2021
Power-to-Hydrogen
Power Play: Renewable Energy Update
6 April 2021
Focus PV – Floating Solar and Agrivoltaics
Power Play: Renewable Energy Update
23 March 2021
Related Insights
EEG 2027 – Overview of the Planned Amendment to the Renewable Energy Sources Act
by Dr. Markus Böhme, LL.M. (Nottingham) and Dr. Christian Ertel
New Legal Framework for the Commercial Use of Carbon Capture and Storage (CCS) and Carbon Capture and Utilisation (CCU)
by multiple authors
Amendment to the Energy Industry Act: changes for energy supply companies and grid and system operators
by Dr. Christian Ertel and Dr. Markus Böhme, LL.M. (Nottingham)