Germany: Ministry issues funding guidelines for industry electricity price (Industriestrompreis)

The guidelines are based on the Clean Industrial Deal State Aid Framework (CISAF) adopted by the European Commission and specify the key policy outline which the Federal Ministry for Economic Affairs and Energy issued in November 2025. The scheme has a budget of EUR 3.8 billion and aims to support, during the years 2026 through 2028, power‑ and trade‑intensive industries that face higher electricity costs than competitors in countries with less ambitious climate‑protection measures than the EU’s and are therefore considered at risk of relocation.

What do I need to know?

Eligible companies

Companies operating in an economic sector with a significant risk of relocation according to the list in Annex I, sub‑list 1 of the Guidelines on State aid for climate, environmental protection and energy 2022 (2022/C 80/01; “CEEAG”) are eligible for funding. Covered sectors include, in particular, the metal, chemical and paper industries, as well as mechanical engineering, raw‑material extraction and the manufacture of cement, semiconductors and battery cells. In addition, companies operating in a sector that – following a decision by the European Commission – meets the eligibility criteria in paragraph 116 of the CISAF will be eligible. The Ministry has initiated a consultation process to potentially extend the list of eligible sectors. Where a company operates across several sectors, its principal activity is decisive. Undertakings in difficulty are mostly excluded from aid.

Application procedure

Eligible companies may apply for aid with the competent authority, the Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle – BAFA), annually for the respective preceding year, i.e. for the first time in 2027 for 2026. Further details are still to be published by BAFA.

Basis aid amount

The support applies to 50% of eligible electricity consumption. For that volume, beneficiaries receive compensation equal to 50% of the reference price. The reference price is the average daily settlement price of power forward contracts at the power exchange EEX in the calendar year preceding the relevant year. The price is capped at 5 ct/kWh.

Eligible electricity consumption

Only electricity consumed by the company at consumption points in Germany, equipped with separate metering devices, in the year of approval/award is eligible; electricity passed on to third parties is excluded. In addition, electricity used for secondary energy and media (e.g. heat, steam) supplied to the relevant company via the infrastructure of an industrial park may be considered. However, amounts of electricity for which aid under the Electricity Price Compensation (Strompreiskompensation) scheme is sought for is not eligible.

Decarbonization investment obligation

The applicant must commit to invest at least 50% of the aid amount in new or modernised assets in Germany that make a measurable contribution to reducing electricity‑system costs and do not increase fossil‑fuel consumption. Eligible uses are: 

• development of renewable energy generation capacities
• energy storage solutions
• measures to increase demand-side flexibility
• energy efficiency improvements affecting power demand
• development of electrolysers for the production of renewable or low-carbon hydrogen
• electrification measures
• infrastructure modernisation and expansion measures, e.g. grid connections and integrated distribution networks
• costs for the integration of power from new or modernised renewable energy plants as well as payment of building cost contributions (Baukostenzuschüsse – BKZ) in particular for grid connection capacity expansions
• costs of electricity procurement under newly concluded power purchase agreements (PPAs), insofar as those PPAs finance new or modernised renewable energy plants. 

Flexibility bonus

If, when filing the application, the applicant commits to invest 80% of the aid in measures increasing demand-side flexibility, a flexibility bonus of 10% of the basic aid amount is granted. 75% of the additional aid amount need to be invested in such measures as well.

Payment procedure

Payment of aid is subject to Parliament’s budget approval for the respective year and availability of sufficient funds. If approved funds are insufficient to cover all applications, aid amounts will be reduced pro rata. Aid will be granted after positive assessment of the application

Implementation deadline

Implementation of investment measures may occur only after the application has been submitted. The investment measures must in principle be completed within 48 months of the aid award; exceptions may apply where the applicant provides evidence to the competent authority that a longer deadline is adequate. The latter might not only be the case where complex construction works are involved but also with respect to PPAs with a fixed term exceeding the 48-month period. Legal certainty can be achieved via a preliminary decision by the competent authority.

Combination with other subsidies

The Industry Electricity Price aid may be combined with other state aid, in particular under the Electricity Price Compensation, for other determinable eligible costs. In addition, other aid with respect to the same eligible costs, e. g. for power may be combined with other subsidies unless the combination results in exceeding  maximum aid intensity or the maximum aid amount applicable for these other subsidies.

Reporting obligations

The guidelines provide for detailed documentation, reporting and control obligations. In addition, any application covering eligible electricity consumption of 10 GWh or more is subject to audit and certification by a certified public accountant; the certificate must be submitted with the application.

In the event that the decarbonization investment obligation has not been fulfilled within the deadline for implementation, the aid will be reclaimed.

What should I do next?

Companies which engage in activities that are eligible for the Industry Electricity Price scheme should assess whether they may obtain aid for their electricity consumption. This may include measures for metering and distinguishing such consumption from power consumed by other parties. They should also check potential investment measures and their costs compared to the expected aid amount. As the case may be, they may obtain a preliminary decision from the BAFA on the eligibility of certain decarbonisation investment measures. Companies should also consider potential combinations of the Industry Electricity Price with other support schemes, in particular the Electricity Price Compensation.