The German government remains steadfast in its commitment to introducing a subsidized “industrial electricity price” for energy-intensive industries, despite recent internal tensions and ongoing negotiations with the European Commission. Economics Minister Katarina Reiche (CDU) asserted in an interview with “Handelsblatt” that the initiative, slated to take effect retroactively from January 1, 2026, remains on track and delays are not anticipated.
The subsidized rate, fixed at five cents per kilowatt-hour, is intended to alleviate the financial burden on German industries facing escalating energy costs and to prevent relocation of operations to more competitive markets. Reiche emphasized the government’s active pursuit of available regulatory loopholes within EU state aid law to maximize the program’s impact and bolster key sectors within the German economy.
The announcement arrives amidst palpable friction within the governing coalition of CDU, CSU and SPD. Earlier this week, Dirk Wiese, parliamentary managing director for the SPD, publicly criticized Reiche’s perceived lack of engagement on social welfare reform (specifically regarding citizen’s income regulations) and subtly questioned her dedication to the industrial electricity price. His remarks suggested a sentiment within the SPD that Reiche’s prioritization of industrial interests potentially overshadows broader social welfare concerns.
The coalition agreement, reached in early November, stipulated that companies could apply for the subsidized rate from 2027, with payments retroactive to the beginning of 2026. While Reiche’s assurance of adherence to the timeline offers a degree of stability, the underlying tensions highlight the challenges of balancing competing policy priorities within a complex governing alliance. The Commission’s approval will be crucial, as it represents a potential point of contention given broader concerns over state subsidies and market distortions within the EU. The speed and conditions of that approval will ultimately dictate the program’s true impact and could reignite debate within the coalition.