German industry warns against cuts to electricity grid subsidies

German industrial associations have urged the federal government to maintain financial support for electricity transmission grid charges, warning that planned reductions could increase energy costs and further weaken the competitiveness of energy-intensive industries.

In a joint appeal published on November 3, six organisations – VEA, VIK, WV Metalle, WV Stahl, ZVEI and the German Chamber of Commerce and Industry (DIHK) – called on the Bundestag to preserve the annual €6.5 billion federal subsidy for transmission network charges.

The associations argue that electricity prices in Germany remain significantly higher than those in major competing economies, including the United States and China, as well as in several other European countries.

Planned €1 billion reduction raises concerns

At the beginning of 2026, the German government introduced a €6.5 billion budget contribution to reduce electricity transmission network charges. According to the associations, this measure brought the charges back to approximately their 2023 level following a substantial increase.

However, plans to reduce the subsidy by €1 billion have prompted concerns that part of this relief could be reversed.

The organisations warn that lower government support would translate into higher network charges for industrial companies, commercial electricity users and households.

They also point to continued pressure on energy markets from the Middle East crisis, which they say has contributed to rising electricity prices.

For energy-intensive industries such as steelmaking and non-ferrous metals production, electricity costs remain a significant factor in international competitiveness.

Industry calls for long-term planning certainty

The associations argue that transmission network costs are likely to remain elevated or increase further in the coming years, making continued government support necessary.

They also warn that reducing the subsidy could undermine investment confidence and weaken incentives for industrial electrification, which is central to Germany's decarbonisation strategy.

In their joint statement, the organisations called on the Bundestag to maintain the full annual contribution of €6.5 billion, in line with the government's previously announced commitment.

The appeal highlights the continuing tension between Germany's energy transition objectives and the need to maintain competitive operating conditions for industrial manufacturers.

For the steel industry in particular, affordable electricity is becoming increasingly important as producers pursue lower-emission technologies and more electrified production processes.

Source: WV Stahl, Photo: Fotolia