Germany to Launch Electricity Price Support for Industries from January 2026

Post by : Saif Nasser

Germany’s government has announced plans to introduce a new electricity price support programme for its industries starting January 1, 2026. The goal of the plan is to help manufacturers cope with high energy costs, protect jobs, and strengthen the country’s industrial competitiveness in Europe.

Economy and Energy Minister Katherina Reiche confirmed the plan during a press briefing in Berlin on Monday. She said the final details are being discussed with the European Commission, which must approve the plan before it begins. “We are in the final stages of negotiations with the European Commission. I expect that we will introduce the industrial electricity price on January 1, 2026,” Reiche said.

This programme is a key step in Germany’s efforts to ease pressure on energy-intensive sectors like steel, chemicals, and manufacturing. Many of these industries have struggled since energy prices began to rise sharply after the start of the Russia-Ukraine war in 2022. The conflict disrupted Europe’s gas supply and increased the cost of electricity across the continent.

According to German newspaper Handelsblatt, estimates from a group of think tanks led by the advisory body DENA suggest that the scheme could cost the German government around 4.5 billion euros (about $5.25 billion) over three years. The goal is to set a fixed industrial electricity price of about 5 euro cents per kilowatt hour, which is far lower than the current market rate.

German industries have long complained that high electricity costs make it difficult to compete with companies in other countries, such as the United States or China, where energy prices are much lower. The new subsidy aims to keep production in Germany and prevent companies from moving their operations abroad.

Minister Reiche also mentioned that another programme — one that supports industries that must buy greenhouse gas emissions rights — is being positively received by the European Union. This plan, known as “electricity price compensation,” helps companies that are required to purchase emission certificates as part of Europe’s climate policy. Reiche said the EU Commission has sent “positive signals” about extending this programme well beyond 2030.

The government sees this energy price policy as an important tool to maintain Germany’s position as one of Europe’s strongest industrial powers. Many large companies have been warning that without government help, they could face losses, production cuts, or even job reductions.

Experts say that the timing of the plan is crucial. Germany has been facing slower economic growth and higher inflation, while energy prices have stayed high due to global market instability. Lowering electricity costs for key industries could give a much-needed boost to the economy.

However, not everyone agrees with the plan. Critics argue that using billions of euros in public funds to lower electricity costs for businesses could be unfair to smaller companies and households that are also struggling with high energy bills. Environmental groups have also expressed concern, saying that lowering industrial energy costs could reduce the pressure on companies to become more energy-efficient or switch to renewable sources.

Still, the government insists that the programme will not weaken its climate goals. Minister Reiche said that supporting industries through this transition is part of a broader strategy to achieve a sustainable and balanced economy. She emphasized that Germany remains committed to reducing emissions and investing in renewable energy sources such as wind and solar.

The plan is also expected to complement the European Union’s broader efforts to build a greener industrial system while keeping its economies competitive. EU authorities are reviewing similar energy support mechanisms across several member states to ensure fair competition in the single market.

If approved, Germany’s electricity price support scheme will begin at the start of 2026, providing immediate relief to industries hit hardest by global energy shocks. Over the next three years, it could play a key role in stabilizing the country’s manufacturing base while the transition to cleaner and more affordable energy continues.

For many in Germany’s business community, the announcement brings hope that the government is serious about keeping industry strong in the face of global economic challenges.