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Germany’s Coalition Approves Industrial Power Subsidy, Gas-Plant Tenders and Flight Tax Cut

EU state-aid clearance still needs to be secured before the package can take effect.

Overview

  • The government will introduce an industrial electricity price of about 5 cents per kilowatt hour for 2026 to 2028, targeting energy‑intensive firms exposed to global competition.
  • A new power‑plant strategy will tender roughly 8 gigawatts of dispatchable capacity in 2026—mainly gas‑fired plants to be operating by 2031 to back up renewables.
  • The air‑traffic ticket tax will be lowered from 1 July 2026, providing about €350 million in relief, with initial reductions in air‑navigation fees planned for 2026 and further cuts through 2029.
  • A Deutschlandfonds will be set up as a vehicle to attract private capital into areas such as energy infrastructure, raw‑materials security and growth startups, with details to be presented in the coming days.
  • Berlin expects EU approval for the subsidies and tenders and pegs the industrial power aid at €3–5 billion a year from the Climate and Transformation Fund, while environmental groups criticize the flight‑tax move and coalition disputes on combustion‑engine rules and pensions remain unresolved.