Government announces reduction in electricity costs
The German cabinet has made a series of significant decisions aimed at boosting the economy, protecting the environment, and strengthening pension schemes. Here's a breakdown of the key decisions:
- Reduction in Electricity Tax for Industries: More than 600,000 industrial operations in Germany will see a reduction in their electricity tax, starting from 2026. This move is expected to benefit not only businesses but also private households, as a reduction in electricity prices is anticipated.
- Strengthening Consumer Rights in Online Shopping: The cabinet has approved a resolution aimed at simplifying e-commerce refunds, with traders required to offer a clearly visible refund button on their websites, following EU guidelines. This decision is intended to strengthen the rights of consumers in online shopping.
- Increase in Employee Pension Contributions: The cabinet has decided to increase employee pension contributions, as part of the government's plan to strengthen pension schemes as the second pillar of old-age provision.
- Implementation of the Common European Asylum System (CEAS): The CEAS is set to be integrated into national law. The Interior Ministry views this as a foundation to control and regulate the granting of international protection throughout the EU, with the aim of limiting so-called irregular migration.
- Pension Scheme Strengthening Act: The cabinet has approved a draft bill from the Federal Ministry of Labor for the implementation of the Pension Scheme Strengthening Act. This act is expected to particularly benefit employed individuals with low incomes and those in small and medium-sized enterprises.
- Relief from Gas Storage Surcharge: The already decided abolition of the gas storage surcharge will relieve families by around 50 euros per year, starting from 2026. The federal government plans to balance the gas storage surcharge account with 3.4 billion euros from the KTF for the current year.
- Marine Protected Areas: Six marine protected areas in the North and Baltic Seas may be banned for oil and gas extraction if the Bundestag approves the draft. This decision is based on the poor state of conservation and environmental condition of these bodies of water.
- Subsidy for Transmission Network Costs: Six and a half billion euros are planned from the Climate and Transformation Fund (KTF) each year for the subsidy. This subsidy is expected to benefit all consumers and businesses, especially medium-sized enterprises, with a family potentially saving up to 100 euros per year on their electricity bills.
- Relief for Households Affected by Transmission Network Costs: Households particularly affected by the costs of expanding the transmission network will see the most relief, as the subsidy is designed to offset these costs.
- Other Decisions: The cabinet has approved draft bills on four other topics, though details about these decisions have not been disclosed.
These decisions reflect the German government's commitment to fostering economic growth, protecting the environment, and strengthening social welfare.
