German Government highlights strategic importance of national steel industry

On December 9, 2024, German Chancellor Olaf Scholz convened top representatives from the steel industry, trade unions, and employee councils at the Federal Chancellery to address the challenges facing the steel sector in Germany. The meeting focused on securing the competitiveness of the industry, which is vital to the country’s economy, against the backdrop of rising energy costs, unfair global competition, and the transition to climate-friendly production.

Chancellor Scholz stressed the strategic importance of the steel industry, describing it as a pillar of Germany’s industrial base. "The German steel industry is indispensable for our country. It provides numerous high-quality jobs and produces steel of immense geostrategic importance for industrial production and, consequently, our economic growth," Scholz said. He highlighted the government’s commitment to competitive energy pricing, modernization of production facilities, and advocating for fairer trade conditions internationally.

The Chancellor outlined several measures to support the industry, including capping power transmission costs at 3 cents per kilowatt-hour, preventing increases in transmission fees for 2025, and continuing substantial investments in the transition to green steel production. Scholz also emphasized the importance of retaining and enhancing EU mechanisms like electricity price compensation, which significantly reduces energy costs for steel producers. "We will advocate in Brussels to ensure that key relief measures for the steel industry remain in place and are expanded," he said.

Gunnar Groebler, President of the Wirtschaftsvereinigung Stahl (German Steel Federation), welcomed the Chancellor’s focus on trade protections but stressed that more decisive action is needed. "The German steel industry is under acute threat from unfair competition in global markets. It is encouraging that the Chancellor has committed to advocating for robust trade protections in Brussels. Europe must act decisively, defend the interests of its industries, and implement clear protective measures," Groebler said. He called for a European steel summit to outline and implement binding solutions to safeguard the sector.

On the issue of energy costs, Groebler was critical of current proposals. "The suggested relief of €1.3 billion for network usage fees falls short. To ensure the industry’s competitiveness, we need a sustainable and forward-looking solution, along with planning certainty that transcends electoral cycles," he said. High energy costs, he argued, remain the most pressing issue for the sector, threatening its ability to compete internationally.

Source: Bundesregierung / WV Stahl, Photo: WV Stahl