Green light for electricity price relief for energy-intensive users?
Authors: Peter Mussaeus, Michael H. Küper, M.Sc., Dr. Daniel Callejon and Sarah Müller
The state aid framework for a temporary electricity price relief for energy-intensive users until 2030 is in place
On June 25, 2025, the European Commission adopted the Clean Industrial State Aid Framework (CISAF). It is intended to support the objectives of the Clean Industrial Deal and simplify state aid rules for clean industries considering recent economic and energy policy developments.
The CISAF framework complements the guidelines on state aid for climate, environmental protection, and energy (CEEAG) and replaces the temporary crisis and transition framework (TCTF). In addition to accelerated approval procedures for Member States' investments in clean energy projects, it focuses on supporting the industry in decarbonization and preventing the relocation of energy-intensive companies by granting temporary electricity price relief.
State aid law basis for a temporary price relief
The latter enables Member States to introduce a so-called temporary electricity price relief for energy-intensive users. Under this scheme, Member States may, upon request, grant reductions on the wholesale price of electricity for a certain share of a company's electricity consumption. Companies from sectors that are particularly affected by international trade conditions and are particularly electricity-intensive are eligible for this aid. Relief can be granted for a period of up to three years. It may not exceed a reduction by 50% of the yearly average wholesale market price in the bidding zone to which the beneficiary is connected and may not cover more than half of the company's annual electricity consumption. It may not reduce the price below EUR 50/MWh in total.
If this limit is not exceeded, the aid may also be combined with other state aid or de minimis aid. In this context, however, it is questionable what interactions with other relief measures need to be considered and to what extent this will affect the above-mentioned minimum price.
Companies must provide something in return
A beneficiary must invest at least 50% of the aid received in new or modernized equipment that contributes to reducing the system costs of the electricity grid without increasing the consumption of fossil fuels. In principle, these facilities must be put into operation within 48 months of the aid being granted. These investments may not themselves be supported by other aid measures. The extent to which these (ecological) quid pro quos must be provided in each case or whether exceptions may apply if, for example, no economically feasible measures exist in the specific case is not explicitly regulated and, in our view, remains open.
In any case, additional support of up to 10% of the aid amount granted may be approved if a company can demonstrate that it allocates at least 75% of this additional grant to decarbonization measures and 80% of the total investment amount to investments to increase flexibility of demand, including non-fossil back-up supply. CISAF is limited in time until December 31, 2030. No payments may be made after this date.
Basis for capacity mechanism
In addition, CISAF forms the basis for numerous other energy-related subsidies. It also creates the framework for capacity mechanisms. This allows Member States to ensure security of supply in the electricity market by remunerating additional capacity (e.g., power plants, storage facilities, demand management) so that it is available when needed.
The German Federal Ministry for Economic Affairs and Energy welcomed the EU Commission's decision and announced that it would soon present a concrete concept for a temporary price relief for energy-intensive users, among other things, to quickly reduce electricity prices for companies.
We are available at any time if you have any questions about CISAF and/or the key points regarding the price relief framework or the new capacity mechanism.
