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Germany’s Coalition Backs Targeted Relief Package: Industrial Power Subsidy, Plant Tenders, Air Ticket Tax Cut and New Investment Fund

Formal EU approval remains pending, with annual costs estimated at €3–5 billion from the Climate and Transformation Fund.

Overview

  • A subsidized electricity price of about 5 cents per kilowatt-hour will support energy‑intensive companies from 2026 to 2028.
  • Roughly 8 gigawatts of backup capacity will be tendered in 2026, with mainly gas-fired plants due in service by 2031 and specified to allow future hydrogen use.
  • The air ticket tax is slated to be reduced on 1 July 2026, delivering around €350 million in relief, with additional steps to lower aviation fees and charges through 2029.
  • A Deutschlandfonds will be launched to attract private capital into Mittelstand, startups and resilience projects, with detailed design to be presented in the coming days.
  • Talks with the European Commission are largely concluded and approval is expected; separate disputes over the 2035 combustion‑engine rule and pension reform remain unresolved.