Pragmatism emerges as Germany peels back green regulations, cheapens energy for big business
September 8, 2025|4 min read
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Berlin moves to permanently cut electricity tax for industry and agriculture and to subsidize transmission grid fees in 2026. The package signals a turn from performative climate policy toward cost realism to keep factories at home.
It would appear that the last decade’s fever dream of symbolic environmentalism is winding down. In Germany, at least, Greta Thunberg’s spirit animal will be working with a narrower list of targets to haunt.
Call it the EROI principle. Energy Return on Investment measures how much usable energy you get out compared with the energy put in to obtain it. High-EROI sources leave a surplus that powers manufacturing, logistics, hospitals, and R&D. Low-EROI sources can keep your lights on in a handful of homes but offer scant surplus for heavy industry.
For the U.S., this is competitive pressure in plain view. If Germany structurally lowers industrial power costs while maintaining climate targets, U.S. utilities and state regulators will face louder calls for long‑term industrial tariffs, site‑ready baseload, and predictable interconnection timelines. The question isn’t ideology; it’s Energy Return on Investment (how much usable energy the system delivers per unit invested). Cheap, reliable power is the raw material of manufacturing. When a G7 peer moves to hard‑wire lower non‑energy price components (taxes, grid‑fees) and protect energy‑intensive exporters, American planners can’t assume Europe will price itself out of the game.
German industry has bled competitiveness since 2022 under a triple squeeze: expensive gas, rising grid fees, and policy risk around electricity taxes and levies. Americans should note that these aren’t concerns arising from acts of God or infrastructural barriers. These were policy decisions, arbitrary and synthetic.
By locking the power tax at the EU floor for factories and buying down transmission fees for 2026, the government is signaling a pivot to price realism, accepting that unit energy cost is industrial policy. The move also aligns with the parallel Franco‑German agenda to secure an industrial electricity price and expand air‑defense and strategic tech initiatives, an implicit acknowledgement that Europe needs a cheaper, firmer power base to rearm and reshore.
