EMD Directive: Status of German implementation after the deadline expiration

On July 17, 2026, the implementation deadline for the EMD Directive elapsed, but there can be no question of a complete German implementation. While central building blocks of the Electricity Market Directive are already anchored in the Energy Industry Act (EnWG), an essential part is still missing, and the European Commission has therefore initiated infringement proceedings against Germany. This article classifies what the directive demands, what Germany has already delivered, and where things are still lagging.

What is the Electricity Market Design (EMD) Directive (EU) 2024/1711?

Directive (EU) 2024/1711 – officially the Directive on improving the Union's electricity market design, in short EMD Directive or Electricity Market Directive – was adopted by the European Parliament and the Council on June 13, 2024, and published in the Official Journal of the EU on June 26, 2024. It amends the existing Electricity Market Directive (EU) 2019/944 and the Renewable Energy Directive (EU) 2018/2001.

Your stated goal: to make the European electricity market more resilient to price shocks, better protect consumers from price volatility, and at the same time accelerate investments in renewable generation and flexibility options such as storage and demand response. Unlike the Electricity Market Regulation (EU) 2024/1747, which was adopted in parallel and is directly applicable as an EU regulation, the EMD Directive first had to be transposed into national law. In Germany, this primarily includes the Energy Industry Act (EnWG), supplemented by the Renewable Energy Sources Act (EEG) and subordinate ordinances such as the Electricity Basic Supply Ordinance (StromGVV). A broader overview of the entire reform package – including the regulation that is already directly applicable, CfDs, and PPAs – is provided by our article on EU Electricity Market Reform.

An overview of the key requirements of the EMF Directive

What Germany has already implemented

The key step in Germany’s implementation of the EMD Directive came before the actual deadline. On November 13, 2025, the Bundestag passed the “Act Amending Energy Industry Law to Strengthen Consumer Protection in the Energy Sector and to Amend Other Energy Law Provisions”; the Bundesrat followed suit on November 21, 2025. In effect since December 23, 2025 (Federal Law Gazette 2025 I No. 347), this omnibus bill amends a total of 28 laws and regulations – including the Energy Industry Act (EnWG), the Renewable Energy Sources Act (EEG), the Building Code, the Metering Point Operations Act, and the Heat Planning Act.

The following changes are particularly relevant for the EMD implementation:

• Section 42c EnWG (Energy Sharing): For the first time, a legal basis allowing households or businesses to share self-generated electricity from renewable sources among each other without taking on the traditional obligations of an energy supplier.
• Section 11c of the Energy Industry Act (EnWG): Energy storage systems are granted “overriding public interest” – which is relevant when balancing them against other protected goods in approval procedures.
• Section 35, paragraph 1, items 11 and 12 of the German Federal Building Code (BauGB): Battery storage systems with a capacity of 1 MWh or more, as well as intraday heat and hydrogen storage systems, are granted special outdoor use privileges under building codes.
• Section 118(6) of the Energy Industry Act (EnWG): The proportional network fee exemption for multi-useBattery storage It has been clarified that this applies only to electricity that is fed back into the same grid. The deadline for commissioning to qualify for the 20-year exemption has been extended to August 4, 2029.
• § 118 para. 7 EnWG: Transitional provisions for existing customer systems through January 2029.
• Section 13l of the Energy Industry Act (EnWG): Regulates the retrofitting of large power generation facilities (50 MW and above, primarily coal-fired power plants scheduled for decommissioning) to provide reactive power, inertia, and short-circuit capacity for grid stability.

Germany has thus transposed key elements of the directive—in particular those concerning energy communities and the regulatory status of storage facilities—into national law even before the deadline.

What's Still Up in the Air

Despite these amendments, the implementation of the EMD is not yet complete. A key component is still missing: the redesign of renewable energy subsidies through two-way contracts for difference (CfDs) as well as the full implementation of expanded consumer rights (freedom to choose between contract types, crisis mechanism) and the final Capacity market-structure.

The EEG amendment responsible for this is currently still in the legislative process. The BMWE submitted the draft bill and the consultation of the federal states and associations only on July 17, 2026 initiated. This took place exactly on the day the deadline expired, and not before. Until the bill is passed by the Bundestag and the Bundesrat and formally notified to the European Commission, its implementation will therefore be considered incomplete for the foreseeable future.

EU Infringement Proceedings Against Germany

A response from the German federal government to a Bundestag inquiry dated June 2, 2026 (Parliamentary Document 21/6259) confirms that, from the European Commission’s perspective, implementation is not yet complete. According to this response, infringement proceedings are currently underway against Germany under case number VVV 2025/0127 due to failure to notify the transposition of Directive (EU) 2024/1711. For comparison – infringement proceedings (INFR 2021/0028) are also still ongoing for the previous Electricity Market Directive (EU) 2019/944.

An infringement procedure is initially not a sanction mechanism with immediate effect. It begins with a letter of formal notice from the Commission and can drag on through several stages up to the European Court of Justice. Only then do financial penalties come into play. In practice, this means that the national legal framework for the implementation of the Electricity Market Design (EMD) is in a transitional phase. Central questions, such as the design of Contracts for Difference (CfDs), have not yet been conclusively resolved.

Relevance for battery storage operators

For project developers and operators of large-scale battery storage systems, three of the implemented regulations are already practically relevant: the privilege for outside areas in building law facilitates site selection for open-space storage projects, the “overriding public interest” pursuant to Section 11c of the Energy Industry Act (EnWG) strengthens the position of storage projects in approval procedures over competing protected goods, and the clarified proportional grid fee exemption creates more planning security for Multi-Use-Concepts that Peak shaving with Control energy- Combine marketing. How the remaining open points – such as the final structure of the capacity mechanisms – will impact the revenue side can only be reliably assessed after the EEG amendment is finalized.

Previously on

Frequently Asked Questions About the EMD Directive