Energy prices remain high, posing a considerable challenge, particularly for energy-intensive industrial companies. On October 20, 2025, at the trade union conference of the IG Bergbau, Chemie, Energie (IGBCE) in Hanover, Federal Chancellor Friedrich Merz announced that an “industrial electricity price” would be in place by the end of 2025.
Back in 2023, the then Federal Ministry for Economic Affairs and Climate Protection (“BMWK”) presented the concept of a medium-term “bridge electricity price” following the electricity price brake. However, due to the widely differing views within the government at the time (particularly between the Chancellor and the Federal Minister for Economic Affairs), the “bridge electricity price” remained at the draft stage. The current coalition agreement between the CDU/CSU and SPD also mentions an “industrial electricity price,” but without defining exactly how this is to be structured. The current government therefore appears to be pursuing the original idea of creating special regulations for a group of recipients to be determined later to enable production based on competitive energy costs. At EU level, the Commission recently laid the groundwork for a possible industrial electricity price under EU state aid law with the Clean Industrial Deal State Aid Framework (CISAF).
Background: what was and is planned?
With its working paper “Ensuring competitive electricity prices for energy-intensive companies in Germany and Europe” presented in May 2023, the BMWK pursued the goal of providing temporary relief for energy-intensive industrial companies. This would involve a reduced electricity price of EUR 0.06/kWh for energy-intensive companies that compete internationally. The subsidy was intended to run until 2030, with companies having to provide evidence of a transformation plan and therefore reinvest part of the advantage granted in improvement and energy efficiency measures.
Although this concept has not been implemented to date, key elements have been incorporated into the ongoing discussion at German and EU level, including in the state aid framework.
EU state aid framework: CISAF
State subsidies, such as an industrial electricity price, must comply with EU state aid law. In principle, any aid granted by a Member State or through state resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods is incompatible with the internal market if it affects trade between Member States (see Article 107(1) TFEU). Under certain conditions, aid to promote the development of certain economic sectors or regions may be considered compatible with the internal market (see Article 107(3)(c) TFEU). On this basis, the EU Commission published the CISAF aid framework on 4 July 2025, which is limited until the end of 2030.
According to Section 4.5 of the CISAF, “electricity price relief for energy-intensive consumers” is expressly possible. Under state aid law, a reduction of up to 50% on the wholesale price is permissible – for a maximum of half of the annual electricity consumption of the supported company. However, the reduced price may not be less than EUR 50/MWh. A further prerequisite for receiving aid is that the beneficiary must spend “at least 50% of the aid received under this measure” on investments in new or modernised installations (known as the decarbonisation contribution). It is interesting for energy-intensive companies that, from a state aid perspective, it may be possible to combine (in part) the electricity price relief with other subsidies, provided that this combination does not result in the respective maximum aid intensities or maximum aid amounts being exceeded. However, in the context of national implementation, there is currently considerable controversy as to whether a combination of the industrial electricity price and the electricity price compensation should be permitted or whether these mechanisms are mutually exclusive.
Who can benefit?
According to the EU requirements in the CISAF, companies that are at risk of relocating activities to locations outside the EU where environmental regulations are less stringent can benefit. In the opinion of the EU Commission, this particularly affects electricity-intensive companies that are exposed to international competition. In any case, companies whose main activity is covered by the list in Annex 1 of the Guidelines on State aid for climate protection, environmental protection and energy (“KUEBLL”) should be eligible for support (see CISAF, Section 4.5.2.). This does not conflict with the EU regulatory framework for national aid schemes, according to which specialized divisions or parts of companies may also be eligible for aid if their main area of activity is covered by the list in Annex 1 of the KUEBLL. Furthermore, the list is not exhaustive: Member States have the option of demonstrating to the EU Commission that economic sectors not listed are also eligible for funding. The Federal Ministry for Economic Affairs and Energy (“BMWE”), which is responsible for national implementation in Germany, welcomed the introduction of CISAF. The BMWE is currently examining whether to make use of the options granted by the EU to extend eligibility to economic sectors not listed.
Therefore, much will depend on the national implementation of an industrial electricity price within the framework of the CISAF. It remains to be seen how the federal government will implement the use of funds in concrete terms. However, there will be no deviation from the principle of subsidy law that funds may be reclaimed in whole or in part in the event of violations of eligibility requirements or earmarking. In this respect, recipients of subsidies should ensure that there can be no claims for repayment when claiming the industrial electricity price.
Support from Taylor Wessing
Taylor Wessing offers tailored legal advice, particularly at the interface between energy law and EU state aid law. We can support you in the legal structuring of your subsidy project, from the application to the verification of the use of funds. We will keep you informed here about updates on the topic of “industrial electricity prices.”
