Energy industry calls for wider electricity tax relief, hydrogen support from German budget

The German energy industry association BDEW has called on lawmakers to use the ongoing federal parliamentary budget negotiations to ensure wider electricity tax relief and stronger state support for the scale-up of a hydrogen economy.

“Despite a record budget that is supposed to set the course for the future, basic investment projects for a climate-neutral and resilient energy system are being scaled back,” said BDEW managing director Kerstin Andreae. The organisation criticised the fact that the budget earmarked for hydrogen support is set to be cut by 800 million euros compared to 2024, and that the electricity tax cuts would only cover large industry and agriculture businesses, instead of also including other companies and households as promised. Andreae urged lawmakers to make the relevant changes in the budget negotiations.

Parliamentarians this week have started talks on the draft federal budget 2025, which was recently presented by the new German leadership  after getting delayed due to the collapse of the previous coalition government. With a massive increase in defence spending and energy cost subsidies for companies and citizens, the budget aims to achieve the twin goal of ramping up the country’s military and reviving growth in Europe’s biggest economy. Finance minister Lars Klingbeil had announced record investments in his planning until 2029, including money from the country’s 500-billion-euro special fund for infrastructure and climate neutrality.

In a plenary debate in parliament on 9 July, chancellor Friedrich Merz defended the budget, highlighting that it would bring energy cost savings of ten billion euros for businesses and consumers. Merz said that his government would introduce draft laws over the summer, which “will massively accelerate the approval of wind turbines, hydrogen infrastructure and the expansion of geothermal energy, heat pumps, heat storage and heating grids.”