BERLIN, Nov 9 (Reuters) - The German government on Thursday said it had reached an agreement on a package of measures to support the country's industry in the face of high electricity prices over the next five years.

The relief will amount to up to 12 billion euros ($12.83 billion) next year alone, said German Chancellor Olaf Scholz in a statement welcoming the package as "very good news".

The agreement, first reported by the Handlesblatt newspaper, comes after months of wrangling within the coalition over how to ensure German industry remains competitive after Russia curbed gas supplies in retaliation for Western sanctions over the war in Ukraine, sending energy prices sharply higher.

Although the government introduced electricity and gas price caps last year to shield industry and households, companies in Germany say electricity prices are still too high by international standards.

Measures in the new package include cutting the electricity tax to the minimum level permitted by European Union law and extending compensation for firms that compete internationally.

The electricity tax will be reduced from 15.37 euros per megawatt-hour (MWh) to 0.50 euros per MWh, benefiting not only those companies that previously received compensation for peak load, but all companies in the manufacturing sector, the statement said.

Already-existing compensation for 350 firms that are particularly exposed to international competition will be higher and extended for five years, according to the statement.

Finance Minister Christian Lindner said in the statement that all the measures would be financed within the framework of Germany's debt brake, which had been a major sticking point.

Shares in German chemicals companies rose on the announcement, with BASF (BASFn.DE) up 3.1% and Wacker Chemie (WCHG.DE) 5% higher by 1133 GMT.

https://www.reuters.com/world/europe/german-govt-reaches-deal-electricity-price-support-industry-2023-11-09/