New industrial electricity price: who benefits and who loses in Germany?

New industrial electricity price: who benefits and who loses in Germany?

The discussion about industrial electricity prices in Germany has gained momentum in recent weeks and is closely related to the challenges that the domestic industry is currently having to overcome. Federal Economics Minister Katherina Reiche (CDU) announced that such a price would be introduced for 2,000 energy-intensive companies in the chemical, steel and basic materials industries from January 1, 2026. This is a reaction to the extremely high electricity costs and the associated job losses in many German factories. However, as berliner-zeitung.de reports, this plan is also met with considerable opposition.

Another focus is on the DAX companies. Companies like BASF, Thyssenkrupp, Salzgitter AG and Heidelberg Materials could dig deep into their pockets to benefit from the targeted subsidies. BASF, for example, has over 50% of its shares in the hands of foreign funds, including state investors. Critics fear that medium-sized companies and suppliers could come away empty-handed. These companies, which often form the backbone of the German economy, are threatening short-time work or even closures. Holger Lösch from the BDI emphasizes that there is an urgent need for relief for the energy-intensive industry, but at the same time he also calls for structural reforms for a long-term solution.

Competitiveness and jobs

The high electricity price situation endangers the competitiveness of German industry, which IG Metall also emphasizes in its warnings. It expects tens of thousands of jobs to be lost if competitive energy prices cannot be guaranteed. Therefore, both IG Metall and the Federation of German Industries welcome developments in this direction. It becomes particularly interesting when you consider that the EU Commission still has to approve it, as it is a form of aid. In the upcoming negotiations, rapid approval is vital to survival.

A steel summit that took place on November 6th in the Chancellery and was chaired by Chancellor Friedrich Merz brought together key players. In addition to Federal Minister of Economics Katherina Reiche, Vice Chancellor Lars Klingbeil (SPD) and representatives of the steel industry were also present. The main topics were resilience, trade relations and of course the pressing energy prices. It shows that strong interaction between politics and industry is necessary in order to overcome the upcoming challenges together.

Long-term perspectives and solutions

However, there are still open questions regarding the specific structure of the industrial electricity price. Previous considerations ranged from five cents per kilowatt hour for the companies in question. These state subsidies could cost the federal government up to 1.5 billion euros annually, which is to be covered by the climate and transformation fund. There is agreement that a low-bureaucracy regulation is necessary for companies so that proof of use of the subsidies does not become an additional burden.

The chemical industry sees itself as systemically important and demands a permanent reduction in energy costs. However, BASF and the Steel Association express skepticism about the planned measures and expect electricity price compensation to be planned. It therefore remains to be seen how the debate about the fairness of the subsidies and the responsibilities for the industrial location will develop. The negotiations with the EU Commission are in the final phase and the industry is excited to see what solutions will ultimately be on the table.