The German government will provide an annual federal subsidy of €5.52 billion from 2027 to 2029 to reduce electricity grid fees, extending measures aimed at lowering energy costs for companies and households.
The funding will be provided through Germany's Climate and Transformation Fund. The German cabinet has approved the necessary amendments to the Energy Industry Act, under which transmission system operators will factor the subsidy into their grid fee calculations.
Energy cost relief to rise to €13 billion from 2027
Germany is already providing a €6.5 billion subsidy for electricity grid fees in 2026. Combined with the abolition of the gas storage levy and lower electricity taxes for around 600,000 manufacturing companies, measures introduced from January 2026 are expected to provide approximately €10 billion in annual relief.
From 2027, the German government expects the planned annual relief to increase to approximately €13 billion, supported by the introduction of an industrial electricity price for energy-intensive companies. The measures are intended to reduce energy costs, strengthen Germany's industrial competitiveness and safeguard employment.
Lower electricity tax made permanent for manufacturing companies
In addition, Germany has permanently reduced the electricity tax for around 600,000 manufacturing companies, as well as agricultural and forestry businesses, to the EU minimum rate from January 1, 2026. This measure represents approximately €3 billion in annual federal budget relief for companies.
The government stated that maintaining lower electricity taxes is intended to prevent energy costs from rising and investment conditions from deteriorating for businesses, including energy-intensive industrial producers.
Regarding the approval of new regulation, Kerstin Maria Rippel, CEO of the German Steel Federation (WV Stahl), commented, “With the reintroduction of the subsidy for transmission network costs, it was only at the beginning of this year that we succeeded in reducing the network charges, which had exploded in recent years, back to normal levels. To immediately cut this measure again would send a disastrous signal! The goal of sustainably reducing electricity costs for industry would once again become a distant prospect, especially now, when the Middle East crisis is putting immense pressure on energy markets and the already volatile electricity prices are rising even further.”
Rıppel stated that in times of multiple threats and geopolitical uncertainties, the federal government must ensure planning security instead of reversing recently achieved relief measures, and demanded that the budget subsidy of €6.5 billion must be fully maintained – permanently.
