EU’s Vestager Is Hesitant Over Germany’s Electricity Subsidy Plan

The plans of German Economy Minister Robert Habeck to subsidize electricity for energy-intensive companies have received criticism from Margrethe Vestager, the Vice-President of the European Commission, due to concerns over increasing costs.

Habeck, a member of the Greens, suggested reducing electricity prices for energy-intensive industries and those essential to the green transition as a strategy to prevent companies from relocating their production overseas due to increasing energy costs.

Energy-intensive industries should profit from a so-called “bridging electricity price”, he said, reported EuroActiv.

Read more: EU’s Vestager Calls To Relax Rules To Aid Sanction-Hit Companies 

As per the Economy Ministry’s presentation on May 5th, the plan outlines that 80% of electricity needs should be met with a subsidized price of 6 cents per kilowatt hour (kWh) until 2030, aiming to ensure a supply of affordable electricity.

Commission Vice-President Margrethe Vestager expressed criticism towards Habeck’s proposal regarding the competition.

The Commissioner cautioned that offering discounted electricity to large companies, while others in the EU don’t have the same opportunity, requires careful consideration. She discussed the matter with various officials, including Finance Minister Christian Lindner and members of the Bundestag’s Economic Committee, during her visit to Berlin on Monday.

“We don’t have enough information from the plans of the German government to assess it,” said Vestager.