A critical vulnerability has emerged in the German government’s planned Industriestrompreis, or “industrial electricity price” scheme, raising serious questions about its feasibility and potentially exposing a widening rift within the ruling coalition. An internal document leaked to the Handelsblatt reveals that the financing for the initiative, intended to shield energy-intensive industries from volatile electricity prices, remains “not secured” casting doubt on its long-term viability.
The plan, designed to guarantee electricity prices of €50 per megawatt-hour for energy-intensive businesses between 2027 and 2029, is slated to be funded through the Klima- und Transformationsfonds (KTF), the climate and transformation fund. However, the leaked document states that “currently, no funds are provided in the KTF for the HH [budget] years 2027-2029” necessitating negotiations with the Bundesfinanzministerium, the Federal Finance Ministry, to secure the necessary resources. This highlights a potential power struggle between the economics and finance ministries, with the latter likely pressing for fiscal prudence.
Furthermore, the scheme’s projected costs have escalated beyond initial estimates. The leaked draft of the funding guidelines indicates a revised figure of €3.4 billion over the three-year period, a sharp increase from the previously projected €2.7 billion. This rise is attributed to the possibility of combining the Industriestrompreis with existing electricity price compensation measures, implying a broader and more complex subsidy structure than originally anticipated.
The situation exposes a fundamental issue within the coalition government: the difficulty of reconciling ambitious industrial policy goals with prudent fiscal management. Critics argue that the scheme, even if secured, represents a substantial and perhaps unsustainable level of state intervention in the energy market, potentially distorting competition and creating a dependency on state subsidies. The deadline for resolving these critical financing and logistical questions is set for the end of the second quarter of 2026, leaving a significant window for further debate and potential derailment of the entire project. The lack of concrete funding, coupled with rising costs, underscores the political risks and the fragility of the Industriestrompreis initiative and could significantly impact Germany’s industrial competitiveness.