Electricity tax for all to remain unchanged from 2027, as decided by the government
The ongoing debate surrounding the reduction of electricity tax in Germany has taken a new turn, with the government maintaining its position that the relief will not extend to private households and small businesses. Despite the coalition agreement proposing a broad-based tax cut, the federal government has decided to only reduce the tax for large companies in the manufacturing sector, forestry, and agriculture, lowering it from 2.05 cents per kilowatt-hour to the European minimum of 0.05 cents per kilowatt-hour.
This decision, announced in early July 2025, has been met with criticism, particularly from CSU leader Markus Söder, who has repeatedly called for a reduction that includes consumers. Finance Minister Lars Klingbeil (SPD) argued that consumer electricity tax cuts could only be afforded if savings were made elsewhere in the budget.
In response to the criticism, the government has been exploring alternative ways to ease energy costs for consumers. These measures include reducing network charges and abolishing the gas storage levy, which, along with tax reductions for industry, are expected to provide around 10 billion euros in annual relief. For private households, this translates to a relief of up to 3 cents per kilowatt-hour or about 100 euros per year for a family of four, but not through a general electricity tax cut.
The black-red coalition, comprising CDU/CSU and SPD, has not agreed on a concrete time frame for the reduction of electricity tax, despite their stated intention to reduce it. The lack of a specific time frame has been a recurring subject of criticism, with the latest critique coming from CSU leader Markus Söder, who has emphasized that the reduction in electricity tax should apply to consumers as well as the manufacturing industry.
Despite the ongoing criticism, the government spokesman, Stefan Kornelius, stated that while the federal government wants a reduction in electricity tax, no specific time frame has been agreed upon. For now, the German government maintains its position that the electricity tax cut will apply only to companies, not to general consumers, at least for the foreseeable future.
- The local community is closely monitoring the ongoing debate about electricity tax reduction in Germany, as the government's policy appears to only benefit large industries, raising questions about the fairness of the fiscal framework in the sphere of politics and general-news.
- In an attempt to address the concerns arising from the criticism, the government is considering alternative means of providing financial relief, such as reducing network charges and abolishing the gas storage levy for both the industry and vocational training sectors, in addition to exploring vocational training programs to assist households in managing energy costs effectively.
