The Electricity price compensation is a state aid instrument that relieves energy-intensive companies from competitive disadvantages arising from the EU Emissions Trading System (EU ETS). Within the framework of the EU ETS, CO₂ certificates are traded, the costs of which are passed on by electricity producers to their customers through electricity prices. For energy-intensive industries – such as the steel, aluminum, chemical, or paper sectors – these indirect CO₂ costs are significant and jeopardize their international competitiveness.
This is exactly where the CBAM comes in. It compensates for a defined portion of these indirect CO₂ costs and is intended to prevent companies from relocating their production to countries outside the EU where there are no comparable climate protection requirements. This effect is known as carbon leakage.
The SPK has existed in Germany since 2013, as a result of the reformed European Emissions Trading System (EU ETS Phase III, 2013–2020). Funding volumes only increased with the new EU state aid guidelines for ETS Phase IV from 2021 onwards. Its central basis is the EU Emissions Trading Directive (European Union, Directive 2003/87/EC, in particular Art. 10a (6)). The competent authority for applications and processing is the German Emissions Trading Authority (DEHSt) at the Federal Environment Agency.
The SPK is therefore not a general energy price subsidy program, but a targeted instrument of European climate policy. It is intended to secure both the industrial location and the ecological effectiveness of the EU ETS. In return, the Carbon Border Adjustment Mechanism (CBAM) one CO₂ limit compensation system, that subjects imported goods into the EU to the same EU ETS prices.
Which companies are eligible to apply?
Basically, you can energy-intensive companies apply from eligible sectors and sub-sectors. Companies whose economic sector is listed in part I of Annex I of the KUEBEL are eligible for subsidies. Additionally, in its guidelines for state aid in connection with the EU ETS, the European Commission specifies which sectors are considered at risk and may therefore be eligible for compensation. With the expansion to the 2026 framework, the list of eligible sectors was expanded, so that more industries are generally considered.
Typical favored industries include:
- Steel and aluminum production
- Chlor-alkali electrolysis and chlorine chemistry
- Paper and pulp industry
- Glass manufacturing
- Cement production
- Manufacturers of batteries and certain plastics
In addition to sector affiliation, companies must meet further requirements, particularly concerning minimum consumption volumes and compliance with environmental regulations.
The relief itself is calculated based on the indirect CO₂ costs of electricity procurement, a specific CO₂ factor, and the maximum permissible aid intensity. For Germany, the updated guidelines include an emission factor of 0.73 t CO₂/MWh underlying. For existing eligible sectors, the maximum aid intensity increases Starting in 2026, from the current 75 % to 80 %. Newly added sectors typically start with an entry rate of 75 %.
SPK is considered funding subject to budgetary reservations.
For the SPK, the federal budget for 2026 provides for around 3 billion euros from the Climate and Transformation Fund (KTF). This is about 10,2 % entire electricity price subsidy. It there is no absolute claim to payment and it is subject to budgetary reservation. The electricity price compensation is a state subsidy that is only granted within the scope of available budgetary funds. Therefore, there is no legally enforceable claim that the state will pay out money if the allocated pot in the federal budget is empty.
Application and Deadlines
The electricity price compensation is applied for retroactively for the respective billing year that has ended. For the 2025 billing year, the application deadline is regularly until June 30, 2026. Companies should begin application preparation early, as extensive evidence of energy consumption, production volumes, and fulfillment of ecological conditionalities is required.
For smaller applicants with an expected total subsidy of up to 100,000 Euros, simplified procedures apply. In these cases, an audit certificate may suffice instead of a full audit report.
What obligations must companies fulfill?
Energy Management Systems: Tiered Requirements
The eligibility for electricity price compensation is linked to proof of an adequate energy management system. With the Energy Efficiency Act (EnEfG) were the requirements unified and tightened. The requirements are based on the average total energy consumption of the past three calendar years:
From a consumption of more than 7.5 GWh (previously often 10 GWh) are obligated to implement a certified energy management system according to ISO 50001 or a validated environmental management system according to EMAS to introduce and maintain.
Between 2.5 GWh and 7.5 GWh Companies do not have to operate a full ISO 50001 or EMAS system, but they are required to create concrete implementation plans for final energy saving measures - usually based on Energy audits in accordance with DIN EN 16247.
Under 2.5 GWh Lighter evidence may suffice. For companies eligible for SPK below the general EnEfG thresholds, for example, ISO 50005 (a phased approach to a complete energy management system) or documented participation in a certified energy efficiency and climate protection network is recognizable.
Ecological Compensation: More Than Just Systems
The mere existence of an energy management system is no longer sufficient for SPK eligibility. As part of so-called conditionality, companies must demonstrate that they are actually implementing the economic energy efficiency measures identified within their management system—or alternatively, cover a significant portion of their electricity consumption from renewable energies (decarbonization proof).
Furthermore, the following applies At least 50 % The granted subsidy must be reinvested in measures for emission reduction or for lowering electricity costs. This proof of reinvestment ensures that the funding is not used solely to alleviate ongoing costs but also contributes to the active decarbonization of the company.
SPK and the 5-Cent Industrial Electricity Price: Voting Rights Instead of a Combination
A frequently discussed aspect concerns the relationship between electricity price compensation and the planned state-supported Industrial electricity price, which will cap the procurement price for a defined basic volume at 5 ct/kWh. Furthermore, this relief for industry is only planned until the end of 2028.
Both instruments cannot be combined for the same amount of electricity for state aid purposes. Companies must make a clear decision for each billing year on which instrument they wish to use.
In practice, this means considerable planning effort. Since the SPK is calculated based on the current CO₂ certificate price (EUA) and product-specific benchmarks, its absolute value fluctuates with the EUA price. At the end of the year, companies must precisely calculate whether the flat-rate price cap of the industrial electricity price or the classic SPK compensation is more advantageous under the given market conditions.
Not an either/or, but a both/and – at different electricity volumes
Crucial here is a perspective that is often underestimated in practice. The industrial electricity price and electricity price compensation do not act as substitutes, but are temporally and functionally complementary – they address different electricity consumption blocks. Therefore, companies can generally use the industrial electricity price for part of their consumption and apply for the SPK for another part. However, this is only possible if there is no overlap for the same amount of electricity.
The long-term perspective: SPK gains weight
Another dimension emerges over time until 2030, provided the industrial electricity price is continued. With falling futures market prices, it is structurally losing relevance as a price-based bridging solution. The relief effect diminishes because the market price approaches the capped level. Electricity price compensation, on the other hand, is gaining effectiveness in the long term, as it directly addresses the EU ETS CO₂ price, which is expected to continue rising.
The industrial electricity price should therefore be understood primarily as a bridging instrument for the coming years, while the SPK remains the more structurally effective and durable relief instrument.
Combinable relief measures
Regardless of the choice between the industrial electricity price and the SPK, other relief mechanisms can still be combined. The electricity tax (0.05 ct/kWh), lowered to the EU minimum, and reduced network charges can continue to be used with both models, as long as the general EU cumulation limits are observed.
For companies in electricity-intensive industries such as steel, chemicals, paper, glass, and battery production, the skillful use of these instruments can significantly reduce effective electricity costs, thereby significantly influencing location and investment decisions.
The current discussion: Between securing the location and transformation
The electricity price compensation is increasingly caught between industrial, fiscal, and climate policy requirements. It is currently designed as a permanent EU instrument until at least 2030 and is repeatedly extended, adapted, or expanded.
Critics from academia and environmental organizations, however, complain that the SPK in its current form primarily secures the status quo. It does not provide enough incentives for truly green investments. Given tight public budgets, the question is increasingly being asked whether subsidizing fewer jobs with tax money on this scale is justifiable.
In contrast, the industry insists on the SPK as an indispensable pillar: German electricity prices are structurally above international levels, and without reliable compensation, there is a threat of a gradual loss of core industries.
In the long term, the question also arises regarding the relationship with the SPK and the European Carbon Border Adjustment Mechanism (CBAM). The CBAM is intended to place equivalent CO₂ costs on imports from third countries. However, since it primarily targets direct emissions and including indirect emissions through electricity consumption is legally and technically complex, the industry advocates for maintaining the electricity price compensation at least until the end of the current EU state aid period in 2030.
Strategic Decision-Making for Energy-Intensive Companies
In 2026, the electricity price compensation will be far more than a routine bureaucratic application—it is a strategic tool for energy management. The increase in the maximum aid intensity to 80% and the expansion of eligible sectors offer real scope for securing the location. At the same time, the link to the Energy Efficiency Act (EnEfG) and the requirement to reinvest 50% of the aid make it unmistakably clear: The government cushions costs, but in return demands measurable progress toward decarbonization.
For companies, two core competencies are now crucial:
- Precise Calculation Through the complementary use of SPK and the 5-cent industrial electricity price on different electricity volumes, procurement and controlling departments must precisely analyze which model brings the maximum relief for which consumption block.
- Early compliance As the deadline for the 2025 fiscal year is June 30, 2026 and the requirements for audits, ISO certifications, and proof of ecological benefits are high, early and comprehensive documentation is key to success.
Mastering the repertoire of combinable reliefs and utilizing the SPK as a transformation accelerator secures decisive competitive advantages in a volatile market environment.