Economy Minister reports Germany’s allocation of 4 billion euros annually towards electricity subsidies

Germany is planning to provide yearly subsidies of approximately €4 billion to energy-intensive industries to help transition away from fossil fuels and deter companies from relocating abroad. In 2016, electricity and gas price caps were introduced to protect households and industries from rising energy prices, however, companies still argue that electricity prices are too high. Economy Minister Robert Habeck stated that the government aims to incentivize industries to remain in Germany and transform their energy structures by lowering electricity prices. The details of the subsidy are still under debate and the Treasury Department has opposed the plan. Habeck proposed that the price of the subsidy be capped at 6 cents per kilowatt-hour, based on the average electricity price on the exchange. The subsidies will be phased out by 2030 and funded by the Economic Stabilization Fund. The finance ministry previously opposed the subsidy plan due to budget constraints. Habeck emphasized the importance of the subsidies to maintain a future for energy-intensive industries and prevent losses in these regions.