For households and smaller businesses, the so-called price brake will come into effect in March. It will function retroactively from January until April 2024, capping gas prices at 12 euro cents per kilowatt hour (kWh) and electricity at 40 cents for 80% of usage based on last year’s consumption.

Beyond that, the idea is that higher market prices will provide an incentive to save.

For around 25,000 large industrial consumers, prices are to be set for 70% of consumption at 7 cents for gas and 13 cents for electricity. This will kick in from January.

From next year, companies benefiting from the price brake will face restrictions on how much they can pay in managers’ bonuses and dividends.

Those receiving over €25 million in state aid will be banned from paying new bonuses or dividends, with a full ban on any such payments for those receiving over €50 million.

The package passed by lawmakers also includes a levy on energy producers’ excess profits to fund the aid, as well as measures to promote renewable energy.