Committee Decision: No Cut in Electricity Tax for Individual Users in Coalition Proposal - Proposal sought for a protective directive regarding worker safety from radiation risks due to ionizing radiation exposure, as per the Commission's mandate.
In a recent decision, the Coalition Committee in Germany chose to only reduce the electricity tax for the manufacturing industry, agriculture, and forestry, rather than extending the relief to private households. This decision comes despite a promise made in the coalition agreement, as the high estimated cost to the federal budget and the resulting need to prioritize spending restricts relief to business sectors.
The decision not to reduce electricity taxes for private consumers is estimated to cost around EUR 5.4 billion in 2026, according to the Federal Ministry of Finance. This substantial fiscal burden necessitates cuts in other government initiatives to accommodate the expense.
Although some political leaders, such as Friedrich Merz, initially expressed optimism and support for tax relief expansion, the financial implications and the need for budgetary trade-offs have led the coalition to limit the relief to the industrial sector and agriculture only. This divergence from the coalition agreement has caused criticism and frustration among coalition members, including CSU leader Markus Söder, who has openly called for reforms and accused some leaders of lacking coordination on this issue.
However, the coalition decision does state a relief of around ten billion euros for consumers and the economy annually. This relief is not limited to the manufacturing industry, agriculture, and forestry, as initially proposed in the coalition agreement. Instead, it includes measures such as the planned abolition of the gas storage surcharge and the partial takeover of transmission charges, which will benefit private consumers as well.
These measures are expected to result in potential annual savings of up to 100 euros for a family of four. Currently, all consumers, including private households and families, are already relieved by up to three cents per kilowatt hour. It is important to note that the relief for all consumers, as stated in the coalition decision, is not included in the previously mentioned decided measures that benefit private consumers.
In the resolution paper, the reduction of electricity tax for the manufacturing industry and agriculture and forestry is mentioned. However, the resolution paper does not explicitly mention a reduction of electricity tax for private consumers. Instead, it refers to other measures benefiting private consumers, such as the previously mentioned abolition of the gas storage surcharge and the partial takeover of transmission charges.
As of Wednesday, the coalition partners have not found a way to finance this electricity tax reduction for private consumers. The coalition agreement between CDU/CSU and SPD initially proposed a reduction in electricity tax for all consumers. The ongoing discussions aim to find a solution that balances the need for fiscal responsibility with the desire to provide relief to private consumers.
The ongoing discussions within the coalition aim to find a solution that provides relief for private consumers while maintaining fiscal responsibility, as the proposed reduction in electricity tax for all consumers was initially stated in the coalition agreement. However, it's currently unclear how this relief will be financed, as the coalition partners have yet to find a way to do so.
Despite the coalition decision stating a relief of around ten billion euros for consumers and the economy annually, there is no explicit mention of a reduction in electricity tax for private consumers in the resolution paper. Instead, the resolution paper refers to other measures, such as the abolition of the gas storage surcharge and the partial takeover of transmission charges, which are anticipated to benefit private consumers.
