The Federal Ministry for Economic Affairs, under the leadership of Katherina Reiche (CDU), plans to subject the Industrial Electricity Price to budgetary constraints. This information was detailed in the “Discretionary Guideline” regarding the price, as reported by the “Industry and Trade” newsletter from Politico.
The guidelines establish strict conditions regarding subsidies, particularly concerning state funding. They stipulate that the granting of the benefit payment is entirely subject to the availability of necessary budgetary funds in the respective disbursement year. Furthermore, the document warns that if insufficient budget funds are available to cover all entitled benefits, “all charitable benefits will be curtailed on a proportional basis”.
Crucially, the guideline clarifies that the subsidized payment does not constitute a financial right or claim. Instead, the decision to grant the subsidy remains within the mandatory discretion of the approving authority, the Federal Office for Economic Affairs and Export Control (Bafa).
The purpose of the Industrial Electricity Price is to provide approximately 10,000 energy-intensive companies with access to a state-subsidized electricity rate, setting the target price at five cents per kilowatt-hour (kWh). The state will cover the difference between this fixed price and the standard wholesale market rate.
However, the subsidy is subject to three main conditions. First, the benefit only applies to 50% of the company’s total electricity consumption. Second, while the wholesale price is reduced by 50%, it cannot fall below five cents. Third, companies receiving the subsidy are mandated to invest 50% of the benefit funds into decarbonization efforts, a detail also regulated by the guideline. The rules are expected to be published in the Federal Gazette in the coming days, at which point they will come into force.