On 5 June 2026, the Federal Ministry for Economic Affairs and Energy confirmed that companies may claim both the industrial electricity price and electricity price compensation for the same electricity consumption. The implementation of this cumulation option is contingent on the allocation of the necessary funding in the 2027 economic plan for the Climate and Transformation Fund (Klima- und Transformationsfonds, KTF). It remains unclear if or when Germany will implement the approved expansion of the electricity price compensation scheme, and, if so, how it will be financed.
Industrial electricity price and electricity price compensation
The industrial electricity price allows electricity-intensive companies in certain sectors to apply for a non-repayable grant covering up to 50 % of their annual electricity consumption. The grant amounts to 50 % of the average wholesale market price, subject to a target price floor of 5 euro ct/kWh. To qualify, beneficiaries must invest at least 50 % of the discretionary payment they receive in decarbonisation measures, such as renewable energy, energy efficiency, demand-side flexibility or infrastructure modernisation. By contrast, the electricity price compensation scheme compensates companies in certain sectors for part of the CO₂ costs passed on through electricity prices. Applications may be submitted to the German Emissions Trading Authority (DEHSt) at the Federal Environment Agency (Umweltbundesamt).
Recent developments
The industrial electricity price has undergone rapid development in recent months: In November 2025, the coalition committee of the CDU/CSU and SPD agreed to introduce an industrial electricity price for the period from 2026 to 2028. In January 2026, the Federal Ministry for Economic Affairs and Energy published draft funding guidelines setting out the relevant definitions, application procedures and documentation requirements (see our article here). On 16 April 2026, the European Commission granted approval on the basis of the Clean Industrial Deal State Aid Framework (see our article here), and the relief scheme entered into force upon publication of the funding guidelines in the Federal Gazette on 6 May 2026 (see our article here). Further key developments have since followed: On 5 June 2026, the Federal Ministry for Economic Affairs and Energy confirmed that – for 2026 – it intends to make use of the option created by the European Commission to combine the industrial electricity price with the existing electricity price compensation scheme. The electricity price compensation scheme itself is also undergoing significant change: On 8 July 2026, the European Commission adopted a comprehensive extension of its scope.
New European Commission crisis framework permits cumulation
A new European Commission crisis framework provides the legal basis for combining the industrial electricity price with electricity price compensation. In response to the crisis in the Middle East, the European Commission adopted a temporary State aid framework on 29 April 2026 (C(2026) 2947 final, the Middle East Crisis Temporary State Aid Framework, “METSAF”) on the basis of Article 107(3)(c) TFEU. As a short-term crisis measure, METSAF builds on the draft Temporary Iran Crisis Energy Framework (“TICEF”). The framework creates additional support opportunities for electricity-intensive companies: Until 31 December 2026, a reduction of up to 70 % of the average annual wholesale market price – compared with the standard 50 % – may be considered appropriate. Unlike the standard industrial electricity price scheme, these temporary crisis measures do not require a decarbonisation contribution. Most importantly, however, the crisis framework permits the two relief instruments to be combined for the first time. Aid granted under section 4.5 of the Clean Industrial Deal State Aid Framework (industrial electricity price) may now be combined with aid granted under section 3.1 of the ETS State Aid Guidelines (electricity price compensation) for the same electricity consumption – an option that was previously unavailable.
Federal Ministry for Economic Affairs and Energy confirms cumulation option
The Federal Ministry for Economic Affairs and Energy has now clarified how Germany intends to implement the newly created cumulation option. On 5 June 2026, a spokeswoman for the Ministry confirmed in Berlin that Germany plans to allow the two schemes to be combined. According to the Ministry, the new options “temporarily allow the same electricity consumption to benefit, in part, from both the electricity price compensation scheme and the industrial electricity price”. It should be noted that the cumulation option is temporary and applies only to 2026, as the underlying METSAF expires on 31 December 2026 (see above). At national level, however, support remains capped at 50 % of annual electricity consumption and subject to the decarbonisation contribution requirement. The funding guidelines governing the industrial electricity price, published in the Federal Gazette (BAnz AT 06.05.2026 B1), have yet to be amended to formally permit the combination of the two schemes.
In practice, the new cumulation option means that electricity- and trade-intensive companies, particularly in the steel, aluminium, chemicals and paper sectors, may be able to claim both electricity price compensation and the industrial electricity price for the same electricity consumption, provided that the funding guidelines are amended accordingly and the necessary funding is allocated.
European Commission approves expansion of electricity price compensation scheme
On 8 July 2026, the European Commission approved the expansion of Germany’s electricity price compensation scheme, enabling additional energy- and trade-intensive sectors to receive relief for electricity costs retroactively for 2025. The number of eligible sectors will rise from 11 to 31 and will now include companies in the organic chemicals and glass industries. At the same time, aid intensity will increase for sectors already eligible for State aid – reaching 80 % for the steel industry, for example. Federal Minister for Economic Affairs Katherina Reiche described the expansion as unprecedented in scope and an important signal for Germany’s energy-intensive industries. This also indicates that the German government intends to make full use of the expanded electricity price compensation scheme, in addition to the option of combining it with the industrial electricity price. The Federal Ministry for Economic Affairs and Energy has announced plans to revise the electricity price compensation scheme from 2026 onwards and submit the revised framework to the European Commission for approval, with the aim of making the subsidies permanent. The expansion of the scheme – like the option to combine it with the industrial electricity price – remains contingent on amendments to the draft Electricity Price Compensation Discretionary Payment Guidelines (Billigkeitsrichtlinie zur Strompreiskompensation) published on 22 May 2026.
Conclusion and outlook – funding remains uncertain
The new option to combine the industrial electricity price with electricity price compensation will require additional funding of around EUR 1 billion. The Federal Minister for Economic Affairs has therefore called on the Minister of Finance to provide the necessary budgetary resources. On 6 July 2026, the Federal Cabinet adopted the draft budget for 2027. The industrial electricity price will be financed through the KTF, which will be funded by, among other things, revenues from the EU Emissions Trading System (EU ETS) and – as also specified in the 2027 draft budget – EUR 10 billion from the Special Fund for Infrastructure and Climate Neutrality. The draft budget also earmarks approximately EUR 2.7 billion of EU ETS revenues for transfer from the KTF to the core budget, reducing the resources available within the KTF but easing the strain on the federal budget. It remains to be seen whether this will affect the planned cumulation mechanism. According to the Federal Cabinet’s resolution, the 2027 economic plan for the KTF will be prepared separately before the budget legislation is submitted to the Bundestag and Bundesrat. There are also unresolved funding questions with regard to the expansion of the electricity price compensation scheme, which is likewise financed through the KTF. Affected companies would therefore be well-advised to monitor developments closely.
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