The German federal cabinet has announced that it has approved the government draft for the 2027 federal budget and the financial plan up to 2030, with the government stating that the budget combines investments, structural reforms and consolidation measures.
The agreed consolidation measures include cuts to financial aid provided through the Climate and Transformation Fund (KTF), alongside stronger actions. Financial aid under the core federal budget is also set to be reduced. In addition, the government announced that from 2027 not all revenues generated from the EU Emissions Trading System (EU ETS) and the national emissions trading system will continue to be allocated to the Climate and Transformation Fund. Around €2.7 billion of these revenues will instead be transferred to the federal budget.
WV Stahl warns over impact on industrial competitiveness
The German Steel Federation (WV Stahl) has expressed concern after the German Federal Cabinet approved the draft 2027 federal budget, warning that planned cuts to the Climate and Transformation Fund (KTF) could undermine industrial competitiveness and the country’s climate transition.
Commenting on the draft budget, WV Stahl CEO Kerstin Maria Rippel said the proposed reallocation of EU ETS revenues is a warning sign for German industry. She stated that the consolidation of the KTF should not result in the reversal of recently introduced energy price relief measures, arguing instead that revenues generated through emissions trading by industrial companies should be fully reinvested in industry to strengthen competitiveness and support the transition to climate neutrality.
Federation calls for continued industrial support
The federation warned that, if the reallocation proceeds, key industrial support measures, including subsidies for electricity transmission network charges, electricity price compensation, and the planned industrial electricity price, could be undermined. It said these instruments are essential for maintaining Germany’s industrial competitiveness and should be continued, consolidated and expanded.
WV Stahl reiterated its call for an all-inclusive industrial electricity price of €50/MWh, stating that such a level is necessary to secure industrial investment and support the transition to climate-neutral production.
