Overview

• The Federal Constitutional Court rejected complaints from 22 renewable energy producers challenging the legality of profit caps imposed under the 2022 Strompreisbremse (electricity price cap) law.
• The court ruled that the measure, which redirected excessive profits to stabilize energy prices for consumers, was a justified and proportionate response to the exceptional energy crisis caused by the Ukraine war.
• From December 2022 to June 2023, 90% of profits exceeding typical investment expectations were collected, amounting to €750 million, far below the initially anticipated €13.5 billion.
• The court clarified that the profit cap was not a tax or a special levy but a redistribution mechanism benefiting heavily burdened consumers without generating state revenue.
• While the ruling acknowledged an impact on the business freedom of energy producers, it deemed the temporary measure necessary to address the crisis-induced market distortions.