Impact of Reductions and Exemptions in Energy Taxes and Levies on German Industry

The report analyzes the impact of four major German energy policies—the Environmental Tax Reform, the Combined Heat and Power Act, the EU Emission Trading Scheme, and the Renewable Energy Act—on industrial energy costs. It finds that tax exemptions and levy reductions significantly lower energy prices for large, energy-intensive companies, which may reduce incentives for energy efficiency improvements. The analysis highlights a complex pricing landscape where the policy-induced component of energy prices varies by company scale and industry sub-sector, with electricity-intensive sectors facing higher costs than those relying on fossil fuels.

• Tax and levy reductions significantly lower the policy-induced component of electricity prices for manufacturing industries, potentially reducing it by up to 96% compared to regular consumers who face costs of 56€/MWh.
• Energy tax rate reductions for manufacturing industries vary by fuel type, reaching up to 33% for oil, 62% for natural gas, and 55% for liquefied petroleum gas.
• The impact of tax exemptions is most pronounced for high-energy consumption companies; those consuming more than 600GWh see the policy-induced energy price component decrease by an average of 45% compared to companies consuming only 1MWh.
• Companies qualifying for all available exemptions can reduce the policy-induced component of their energy price by up to 75% on an industry average basis.
• The energy policy mix creates a disparity where industry sub-sectors with high electricity shares in their energy mix, such as basic chemicals and transport equipment, face higher policy-induced costs than those using primarily fossil fuels, such as mineral processing or basic metals.
• The complexity of the policy design, which relies on various metrics like non-wage labour costs, turnover, and trade intensity, complicates political debates and may lead investors to overestimate energy costs when locating plants.

APA

Rosenberg, A., Schopp, A., Neuhoff, K., & Vasa, A. (2011). Impact of Reductions and Exemptions in Energy Taxes and Levies on German Industry. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/Reductions-and-Exemptions-on-Energy-Taxes.pdf

Chicago

Rosenberg, Anja, Anne Schopp, Karsten Neuhoff, and Alexander Vasa. Impact of Reductions and Exemptions in Energy Taxes and Levies on German Industry. Climate Policy Initiative, 2011. https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/Reductions-and-Exemptions-on-Energy-Taxes.pdf.

Wikipedia

{{cite report |last1=Rosenberg |first1=Anja |last2=Schopp |first2=Anne |last3=Neuhoff |first3=Karsten |last4=Vasa |first4=Alexander |title=Impact of Reductions and Exemptions in Energy Taxes and Levies on German Industry |publisher=Climate Policy Initiative |date=24 November 2011 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/Reductions-and-Exemptions-on-Energy-Taxes.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rosenberg2011impact, author = {Rosenberg, Anja and Schopp, Anne and Neuhoff, Karsten and Vasa, Alexander}, title = {{Impact of Reductions and Exemptions in Energy Taxes and Levies on German Industry}}, institution = {Climate Policy Initiative}, year = {2011}, month = nov, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/Reductions-and-Exemptions-on-Energy-Taxes.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }