The German Steel Federation (WV Stahl) has warned that the federal government’s planned grid fee subsidy will provide only limited relief for energy-intensive industries. The draft bill, expected to be approved at a cabinet meeting, introduces a subsidy on transmission grid costs starting in 2026.
For the steel sector, grid fees surged by 130 percent since 2023, when state subsidies were discontinued. The sharp rise in costs has severely undermined the international competitiveness of Germany’s steelmakers.
Limited one-year relief
The subsidy, however, is only planned for one year, beginning in 2026. WV Stahl argues that this lack of long-term planning security makes it impossible for companies to commit to the billions required for decarbonization investments.
“We need a reliable and long-term reduction in grid fees. Annual decisions create ongoing uncertainty and undermine competitiveness at a time when the industry is investing heavily in the climate transition,” Kerstin Maria Rippel, managing director of WV Stahl, commented.
Long-term risks for competitiveness
While the reduction in 2026 may provide breathing space, grid expansion costs are expected to rise further, risking even higher electricity prices. According to WV Stahl, every month without a subsidy adds more than €20 million in costs for the steel sector.
The federation has called for the subsidy to start already in 2025, pointing out that the government’s coalition agreement included immediate relief and that sufficient funding exists in the Climate and Transformation Fund.
Industry’s demand: structural reform
WV Stahl insists that temporary measures are insufficient. Instead, a permanent structural reduction in transmission grid fees is required to safeguard both Germany’s industrial competitiveness and its climate neutrality transition.
Without such reforms, Rippel warned, the steel industry risks facing a severe locational disadvantage compared to global competitors.
