The European Commission has announced that it has approved a €3.8 billion state aid scheme for Germany aimed at supporting energy-intensive industries through temporary electricity price relief.
The measures fall under the Clean Industrial Deal State Aid Framework and are designed to address rising energy costs while supporting decarbonization.
Focus on competitiveness and carbon transition
The scheme targets industries exposed to international competition and at risk of relocation due to high electricity prices.
In addition to providing cost relief, beneficiary companies are required to reinvest a significant portion of the aid into climate-friendly technologies such as electrification and energy efficiency improvements.
The support program will run from January 2026 to December 2028. Companies will apply for compensation annually, based on actual electricity consumption and wholesale price levels.
The European Commission stated that the scheme is necessary, appropriate, and proportionate, as it addresses both competitiveness concerns and climate objectives. By combining cost relief with mandatory green investment, the framework aims to strengthen industrial resilience while advancing the transition toward net-zero emissions.
Steel sector raises concerns over effectiveness
Following the approval, German Steel Federation (WV Stahl) CEO Kerstin Maria Rippel stated that while the decision is a positive step, the framework’s current design limits its effectiveness for energy-intensive sectors such as steel.
According to Rippel, the mechanism applies only to a portion of electricity consumption and cannot be combined with existing carbon electricity price compensation schemes.
Calls for more flexible state aid rules
Industry stakeholders have called for adjustments to EU state aid rules, particularly under the proposed Temporary Iran Crisis Energy Framework, which is expected to provide greater flexibility. The German steel sector has urged the government to actively support these changes at the EU level.
In this context, WV Stahl continues to advocate for a reliable electricity price of €50/MWh, including all associated costs such as network charges, taxes, and levies. Such a benchmark is seen as critical to maintaining international competitiveness while enabling the transition toward climate-neutral steel production.
