The large industry demands to reduce its electricity bill by 30% to compete with Europe

MadridAt a time marked by the tension in the global energy market due to the war in the Middle East, the large electricity-consuming industry in the State makes a united plea to reduce its electricity bill. The fuel, automotive, paper, chemical and pharmaceutical, food, cement, mineral raw materials, automotive components and steel sectors posed together this Thursday in Madrid, at the headquarters of the Spanish employers' association CEOE, to present their recipe for reducing industrial electricity costs by between 10% and 30%. Specifically, they propose five tax measures that they consider "indispensable" to have access to "affordable" electricity for Spanish industry and that is also "competitive" compared to other European partners, which, in the sector's opinion, "would curb" relocation processes.

Among the proposals, the progressive elimination of the tax on the value of electricity production (IVPEE) stands out, popularly known as the 7% tax, which the Spanish government eliminated during the energy crisis due to the war in Ukraine. Pedro Sánchez's government reinstated it in 2025 and parties such as the PP and Junts have called for its elimination.

"Affordable energy is not just a technical or conjunctural issue, it is a central element of industrial policy. Without competitive electricity prices, there is no possible reindustrialization," stated Carlos Reinoso, spokesperson for the Alliance for the Competitiveness of Spanish Industry. Under this umbrella, the most relevant employers' associations and organizations from each of the electro-intensive industrial sectors (they represent 70% of Spanish industry) have joined forces with the consultancy EY to present the report Plan for affordable electricity for Spanish industry. Taxation

Regarding the so-called 7% tax, the industrial lobby proposes that if it is not to be eliminated entirely, it should at least be phased out gradually until 2030 to "safeguard" the sustainability of the electricity system. In this way, it proposes a schedule for reducing the tax, which, in parallel, would come with a decrease in the revenues obtained (in 2030 the negative impact would be 2,412 million euros, according to sector calculations).

This tax was created in 2012 because the real cost of producing and transporting electricity was higher than what consumers paid on their bills. A deficit was thus generated that needed to be covered to balance the electricity sector's accounts. Over the years, however, the sector assures that the deficit has been offset, and in fact they believe that with the current electricity mix there can be a surplus.

It is applied to gross income obtained from the sale of electricity. Since the company selling electricity already knows it will have to pay this tax, it increases the price for the final consumer to offset the contribution. In December, Portugal eliminated the MEC, a similar tax.

They also call for extending the 85% exemption from the special electricity tax (IEE) to all manufacturing industries, with a negative impact of 429 million euros for public coffers in 2030, although the industry believes it would be "compensated" by increased demand.

This tax, ceded to the autonomous communities (the revenues are used to pay for social policies), has a rate of just over 5% and falls on all final consumers (companies and families). In 2025, 1,462 million euros were collected, but it is intended to promote responsible consumption because it taxes, precisely, electricity consumption.

Tolls

Two more measures focus on tolls, a charge defined by Competition that is included in the electricity bill to cover part of the cost of transporting energy from a power plant to homes or businesses through electricity transmission and distribution networks. That is, to use the infrastructure.

On the one hand, the alliance proposes a structural reduction of 80% in electricity grid access tolls for electro-intensive consumers. This reduction was implemented in 2022 due to the energy and price crisis, but its continuation depends on the annual extension of a decree. The sector, therefore, requests that it be approved as a structural measure. It would be financed by the General State Budgets.

On the other hand, it also proposes that the costs of technical restrictions due to network congestion be integrated into the calculation of the regulated electricity system tolls paid by all consumers. Currently in Spain, these costs are directly passed on to consumers, but in proportion to final electricity consumption: the more you consume, the more you pay. The lobby considers this an "unorthodox" approach compared to most European countries, where these costs are financed directly through tolls.

Finally, it is proposed to increase compensation for indirect CO₂, that is, subsidies that compensate large industries that consume a lot of electricity for the excess cost of CO₂, which affects the price of electricity, to prevent carbon leakage to countries without equivalent costs.

If all the measures were applied, the alliance calculates that the final price on the tariff for these large consumers would have gone from €58.78/MWh (2025 price) to €39.60/MWh. The two measures with the greatest impact would be the elimination of the 7% tax and the transfer of technical restriction costs to tolls.