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2026年4月24日
Publication series – 3 / 82 观点
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.
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