Söder announces reduction of electricity tax in 2027

According to CSU leader Markus Söder, the German electricity tax will also be reduced for private consumers in the year after next. Starting January 1, 2027, the electricity tax will be reduced "for everyone" to the European minimum, the Bavarian Minister-President reported in Munich on Thursday from the coalition committee meeting held Wednesday evening in Berlin. However, the necessary financial flexibility for this still needs to be worked out, he added.

The CDU-SPD coalition had faced criticism for initially reducing the electricity tax only for parts of the economy, contrary to what was announced in the coalition agreement. This would affect more than 600,000 companies, Söder said, including large parts of the manufacturing sector. Private households would be relieved by the grid fees and the abolition of the gas storage surcharge. The CSU leader admitted that the communication regarding this had been "unfortunate" in advance. The CSU had learned about it partly from the media.

There is no money for immediate reduction

On Wednesday evening, the leaders of Germany's governing parties, the CDU/CSU and SPD, postponed a further reduction in the electricity tax until an unspecified date. According to a final paper following approximately five hours of deliberations by the coalition committee, further relief measures – especially for consumers and the entire economy – will follow as soon as "financial leeway exists."

The fact that the electricity tax would not be reduced for everyone, contrary to the announcement in the coalition agreement, sparked widespread criticism. German Chancellor Friedrich Merz (CDU) and German Finance Minister Lars Klingbeil (SPD) justified the decision with budgetary constraints.

The key question is how to finance a reduction in electricity tax for all German businesses and consumers. According to the Ministry of Finance, such a reduction would incur additional costs of approximately €5.4 billion next year. This would require the German coalition to make concessions on other projects.

APA/dpa-AFX