Following the German federal government’s presentation of the draft 2027 budget for the Climate and Transformation Fund (KTF), the German Steel Federation (WV Stahl) has warned that the proposed reductions in funding could undermine recently introduced energy price relief measures and weaken Germany’s industrial competitiveness.
Kerstin Maria Rippel, CEO of the German Steel Federation, stated that although fiscal consolidation is understandable, reductions in KTF funding should not result in the reversal of the federal government’s initial energy price relief measures as early as 2027. According to Rippel, such a move would undermine planning certainty and confidence in Germany as an industrial location.
Federation warns of higher transmission network costs
The association expressed particular concern over the planned 15 percent reduction in the federal subsidy for electricity transmission network costs. It noted that the recent increase in network charges had only recently been reversed, returning them to 2023 levels, and warned that the proposed cuts would jeopardize that relief.
According to the federation, the measure could increase annual transmission network costs for the German steel industry by around €50 million, representing an increase of approximately 20 percent.
Call for long-term electricity price support
The German Steel Federation also stated that the proposed reductions would move the government’s objective of achieving internationally competitive electricity prices for energy-intensive industries even further out of reach. It called for the current €6.5 billion budget subsidy for transmission network costs not only to be maintained in full but also to be secured over the coming years to provide long-term certainty for industry.
In addition, the association urged the German government to implement further measures to reduce electricity prices to internationally and EU-wide competitive levels. It pointed out that the European Commission has already created scope for linking industrial electricity prices, at least partially, with electricity price compensation mechanisms and called on the German government to make use of this option at the national level.
