The German government plans to halve electricity grid fees for industrial consumers starting in 2026, providing €6.5 billion in subsidies from the Climate and Transformation Fund (KTF) to relieve energy-intensive industries such as steel, cement, and chemicals. The measure, currently awaiting parliamentary approval, is expected to cut the average grid charge from around 6.65 to 2.86 euro cents per kWh — a reduction of nearly 60%.

This temporary one-year measure aims to offset part of the heavy energy cost burden that has weakened Germany’s industrial competitiveness compared to the U.S. and China. The subsidy will be directed to transmission system operators (50Hertz, Amprion, TenneT, and TransnetBW), who will pass on the savings through lower network access fees.

At the same time, the Ministry for Economic Affairs and Climate Action is developing a long-term “industrial power tariff” to provide more predictable, lower electricity prices for large manufacturers — especially those transitioning to low-carbon production such as “green steel” or sustainable cement.

According to draft budget documents for 2026–2029, Germany plans to spend up to €42 billion on reducing industrial energy costs, including tax cuts and lower levies on electricity. The government also intends to reduce the electricity tax (Stromsteuer) for manufacturing companies to the minimum level allowed under EU law.

Industry groups have welcomed the short-term relief but warn that predictability and duration will be crucial to prevent companies from relocating abroad. Critics note that while grid fees are an important component of energy costs, the measure does not address all surcharges and taxes affecting industrial power bills.

If approved by parliament before December 5, the reduced grid tariffs will apply from January 1, 2026 — marking a significant step in Germany’s broader effort to preserve its industrial base during the energy transition.