The industrial electricity price is in the starting blocks: With the publication of the funding guideline on May 6, 2026, the long-awaited legal framework for the German industrial electricity price is now in place. The European Commission had already approved the regulation under state aid law on April 16, 2026. This clears the way for the implementation of the German industrial electricity price. The funding guideline enables energy-intensive companies in Germany to reduce their electricity costs for the years 2026 to 2028. However, companies wishing to benefit from the industrial electricity price must invest at least 50 percent of the aid granted in decarbonization measures.
What does the funding cover?
The new state subsidy provides relief of up to 50% of the wholesale electricity price, limited to a price floor of 5 cents/kWh. In total, 50 percent of the electricity consumption of the respective point of purchase of a company is eligible for aid and thus relief. The difference to the electricity price to be paid is covered by the state. The reference price for the 2026 billing year is EUR 87.44/MWh. As the target price is EUR 50/MWh, EUR 37.44/MWh will therefore be offset by state funds. In addition, a further flexibility bonus of 10 percent can be granted in certain cases.
Cumulation with other aid possible in principle
Cumulation with other state aid is permissible in principle, but requires detailed examination. In practice, the possibility of cumulation relates in particular to electricity price compensation. Companies can submit an application to receive both the industrial electricity price and the electricity price compensation. However, it should be noted that the same electricity consumption may not be eligible for support twice.
However, electricity price reductions due to electricity tax relief remain unaffected. The German government has already reduced the electricity tax for many manufacturing industries to the EU minimum of 0.05 ct/kWh.
How and when should the application be submitted?
The application must be submitted retrospectively for the previous year. The application period is between March 31 and September 30; the specific deadline will be announced by the Federal Office of Economics and Export Control (BAFA). Applications must be submitted electronically via the BAFA portal.
Who is eligible?
Whether a company can claim the industrial electricity price depends on the economic activity of the respective point of purchase. Companies with purchase points in Germany that are assigned to a specific group of economic sectors defined in the funding guideline are eligible to apply. If several activities are carried out at a supply point, the classification of the Federal Statistical Office (WZ 2008) is decisive.
Eligible companies are those that
- are assigned to an economic sector of sub-list 1 of Annex I of the so-called KUEBLL list (economic sectors with a significant (“carbon leakage”) risk of carbon leakage), or
- belong to an economic sector that the EU Commission has classified as eligible for aid on the basis of the CISAF.
The KUEBLL list includes the following industries, for example: Manufacture of paper, chemical fibres, batteries, glass fibre networks, fertilizers, semiconductor production, cement and steel as well as slaughterhouses. The Federal Ministry for Economic Affairs and Energy (BMWE) is planning to expand the group of (sub-)sectors benefiting from the scheme, provided there is a sufficiently high level of electricity and trade intensity and the European Commission grants its approval.
There is no minimum size or flat-rate minimum electricity consumption. This means that small and medium-sized enterprises (SMEs) can also benefit from the funding.
However, it should be noted that applications with a chargeable electricity consumption of more than 10 GWh require an audit certificate from an auditor or similar body.
How should the application be prepared?
Together with the application, the applicant must already provide certain evidence and submit declarations.
- Proof of belonging to the group of addressees: is usually provided by a certificate from the statistical offices of the federal states on the classification of the company (WZ class).
- Proof of chargeable electricity consumption: Indication of the quantities of electricity consumed, self-generated or forwarded at the respective point of purchase, usually evidenced by electricity invoices.
- Proof of the delimitation of electricity consumption eligible for electricity price compensation: either self-declaration by the applicant that no electricity price compensation has been applied for in the relevant billing year or, in the affirmative case, indication of the electricity consumption for which electricity price compensation has been applied for
For applicants with a chargeable electricity consumption of 10 GWh or more, the obligation to provide evidence is structured differently. They must provide the aforementioned three forms of evidence in the form of an audit certificate from an auditor or similar body.
Proof of fulfilled counter-performance is only to be provided after the application has been submitted; however, it is recommended that this is dealt with at an early stage.
What consideration and obligations must be fulfilled?
The granting of the fairness benefit, i.e. the electricity price relief, is linked to decarbonization requirements and extensive obligations: At least 50 percent of the aid granted must be (re-)invested in decarbonization measures. Implementation must take place within 48 months of the aid being granted. The funding guideline contains a catalog of permissible decarbonization measures, including in particular
- Renewable energies: Investments in own generation plants from renewable energies or new Power Purchase Agreements (PPAs) or new heat purchase agreements, insofar as they serve to finance new or modernized RE generation plants
- Energy efficiency: measures to increase energy efficiency in production processes, measures to utilize waste heat and the introduction or expansion of energy or environmental management systems
- Demand-side flexibility: Investments in energy storage and electricity-based flexible heating and cooling, smart control and IT infrastructure and facilities for the production, storage, liquefaction, use and infrastructure of renewable or low-carbon hydrogen, including electrolysis
- Infrastructure modernization: measures to upgrade or expand grid connections, investments in the expansion of internal grid infrastructure and the provision of grid-supporting measures
The additional flexibility bonus can be granted if the applicant undertakes to use at least 80 percent of the decarbonization investments for measures to increase demand-side flexibility.
What are the consequences of violating the funding conditions?
Violations of the funding conditions have clear legal consequences: If the decarbonization requirements are not met or if false or incomplete information is provided, the aid may be reclaimed, plus interest if applicable.
Temporary crisis-related increase in the price of industrial electricity
Against the backdrop of continued high energy prices as a result of the Iran war, the European Commission adopted a new temporary aid framework on April 29, 2026 (Middle East crisis Temporary State aid Framework; METSAF for short). This enables member states to temporarily increase eligible electricity consumption from 50% to 70% within the framework of the industrial electricity price without extending the necessary decarbonization measures.
Whether and to what extent the BMWE will make use of this option is currently still open. The METSAF is limited until December 31, 2026.
Companies should prepare their documents as soon as possible
Companies wishing to take advantage of the industrial electricity price should familiarize themselves with the directive and its detailed requirements as soon as possible. In particular, they should
- develop a resilient decarbonization and investment strategy,
- ensure the data quality for electricity consumption and the preparation of application documents,
- Obtain inspector confirmations if necessary.
Experience has shown that this requires considerable lead time.
Those who take a structured approach at an early stage can use the industrial electricity price not only to cushion electricity costs, but also as a strategic lever to accelerate their own transformation towards climate-neutral production.
Please also read:
How companies should react to electricity prices and grid expansion in 2026
Current situation on the German and European gas and electricity markets
Our cooperation partner KPMG AG Wirtschaftschaftsprüfungsgesellschaft is at your disposal for the necessary audit opinions. Contact: Tobias Adelfang, Director, Audit
