The German Finance Ministry announced on Wednesday a €13.3 billion ($15.2 billion) energy cost relief package for 2027. The funds will be drawn from the Climate and Transformation Fund (KTF) to support both businesses and consumers. The package includes €5.5 billion for electricity grid fees, €5 billion for power-price compensation, and €2.5 billion for an industrial electricity price scheme intended for energy-intensive sectors.
To accommodate this spending, the government plans to reduce funding for other climate-related initiatives. The ministry stated that uncommitted KTF programs will generally face 30% cuts, though existing commitments remain untouched. Notably, support for electric vehicle transitions will be reduced by 10%, totaling €200 million through 2029. Additionally, €2.7 billion in emissions trading revenues typically designated for the KTF will be redirected to cover general budget gaps in 2027.
The relief measures follow rising energy costs attributed to regional conflict, which spurred complaints from German manufacturers regarding global competitiveness. Out of a total €40.3 billion in planned KTF spending for 2027, the ministry has already earmarked €22.5 billion for modernization projects. The budget and the KTF business plan are scheduled for parliamentary approval toward the end of November.