CDU ministers advocate for a decrease in electricity taxes for everyone
In a surprising turn of events, the planned reduction of electricity tax in Germany will only benefit large companies in sectors such as manufacturing, forestry, and agriculture, leaving ordinary consumers and small businesses out of immediate tax relief [1][3]. This decision by the federal government coalition (CDU/CSU and SPD) represents a significant retreat from their initial promise made in the coalition agreement to cut electricity taxes for all consumers.
The CDU politician, speaking in the "Berlin Playbook Podcast" by Politico, described the situation as "an unusual prioritization" [2]. Alexander Schweitzer, Rhineland-Palatinate Minister-President, has expressed his dissatisfaction with the government's prioritization, stating that the Chancellor should be responsible for closing the financing gap to reduce electricity tax for all [1].
Schleswig-Holstein's Minister-President Daniel Günther has also expressed his discontent, stating that the rapid expansion of the mother's pension is being prioritized over the reduction in electricity tax for private households [1]. The exclusion of households and small businesses is seen as breaking a campaign promise and unfairly favoring wealthy companies and large industry, while leaving working-class citizens to bear the brunt of high energy costs [3].
Various industry associations, such as the Federation of German Energy and Water Industries (BDEW), criticize the move as damaging for climate goals, since lowering electricity tax only for industry but not households could hinder investments in energy-efficient technologies like heat pumps and electric vehicles [3]. There is concern that the selective tax cut could distort markets and create inequities between different energy users, leading to calls for a more universal approach to the tax reduction [5].
Some state premiers and stakeholders are calling for a correction of this federal decision. Thuringia's Minister-President Mario Voigt calls for political reliability, stating that questioning the announced reduction in electricity tax could endanger trust [1]. North Rhine-Westphalia's Minister-President Hendrik Wüst (CDU) expects a "clear follow-up" in the upcoming parliamentary procedure to implement the promised reduction in electricity tax for all [1].
However, the leaders of the Union and SPD have decided that there will be no reduction in electricity tax for all companies and private households for the time being [6]. The new federal government is criticized for only providing relief to the industry [7]. The Association of German Trade and the Association of Wholesale and Foreign Trade (BGA) have urged Federal Chancellor Merz to keep the promises of the coalition and reduce the electricity tax for all companies [7].
The SPD faction leader, Matthias Miersch, defends the decision of the coalition committee, stating that no specific promise was made in the coalition agreement regarding the reduction in electricity tax for all [8]. The coalition agreement contains "declarations of intent" but is subject to a financial reservation, according to Miersch [8].
The CDU state premiers are opposing the federal government's decision not to reduce electricity tax for all citizens and businesses [1]. Reiner Haseloff, Saxony-Anhalt's Minister-President, insists on reducing electricity tax for all to the European minimum level [1]. The Bavarian CSU is reportedly a supporter of the rapid expansion of the mother's pension [1].
The discussion about the tax cut will be held in the budget committee, according to SPD economist Sebastian Roloff [9]. Federal Chancellor Friedrich Merz (CDU) and Finance Minister Lars Klingbeil (SPD) defend the decision, citing budget constraints [10]. The coalition agreement contains "declarations of intent" but is subject to a financial reservation, according to Miersch [8].
The additional cost of a reduction in electricity tax for all would be approximately 5.4 billion euros next year, according to the Federal Ministry of Finance [11]. The situation remains fluid as the budget committee discusses the tax cut and the government faces increasing pressure to revise its policy to include all consumers and better fulfil the coalition’s original promises [1][3][5].
The CDU politician, speaking in the "Berlin Playbook Podcast" by Politico, described the government's decision to benefit large industries through the electricity tax reduction as an "unusual prioritization" [2]. This situation, which disadvantages ordinary consumers and small businesses, is seen as a manifestation of unfair financing that favors wealthy companies and the energy sector [3].
