Berlin. Germany's Federal Ministry for Economic Affairs, led by Katherina Reiche (CDU), plans to place the subsidized industrial electricity price under a budgetary reserve. This emerges from the ministry's "discretionary assistance guidelines" for the industrial power tariff, as reported by Politico's "Industry and Trade" newsletter.
Germany slashes industrial electricity costs to 5 cents per kWh—with strict strings attached
If the calculated subsidy claims exceed the funds available in the federal budget, payouts may be reduced proportionally. The guidelines state: "The grant of discretionary assistance is subject to the availability of the necessary budgetary funds in the respective fiscal year." Should insufficient funds be available to cover all approved subsidies, "all discretionary payments will be cut on a pro rata basis."
The document also clarifies that there is no legal entitlement to the assistance. Instead, approval of the subsidy falls under the "discretionary authority" of the licensing body—the Federal Office for Economic Affairs and Export Control (BAFA).
The industrial electricity price scheme aims to provide around 10,000 energy-intensive businesses with access to state-subsidized power at a target price of five cents per kilowatt-hour. The government will cover the difference between this rate and the wholesale market price.
Three key conditions apply: The subsidy covers only 50 percent of a company's electricity consumption; the wholesale price is halved but not reduced below five cents; and businesses must invest 50 percent of the subsidy savings into decarbonization measures. The guidelines outline these requirements in detail and are expected to be published in the Federal Gazette in the coming days, at which point they will take effect.
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