BERLIN (dpa-AFX) - The German steel industry is in trouble - a "steel summit" at the Chancellery is intended to help: What can politicians do to ensure that companies can continue to earn money with steel in Germany in the future? How can steel production become more climate-friendly at the same time? Chancellor Friedrich Merz (CDU) has invited the state premiers, representatives of companies and employees, and cabinet colleagues to discuss the issue.
What is planned?
A month ago, the "car summit" took place, and now the focus is on another crisis-hit industry. The lineup shows how important the "steel summit" is for the federal government: in addition to Merz, Vice Chancellor and Finance Minister Lars Klingbeil (SPD), Economics Minister Katherina Reiche (CDU), and Labor Minister Bärbel Bas (SPD) will also be in attendance. (SPD). It is not intended to be a show event – a government spokesperson spoke of a "paving the way summit": the meeting is intended to pave the way for steps to strengthen the industry and protect jobs.
Lower Saxony's Minister President Olaf Lies (SPD) said: "The steel summit must not become a circle of chairs." What is needed is an "effective steel pact for fair trade and protective measures, for affordable energy and for leading markets for green steel." The states of Lower Saxony, Bremen, North Rhine-Westphalia, Saxony, and Saarland drafted a position paper with various demands, such as lower energy prices and effective protective measures for German manufacturers.
What role does the steel industry play in Germany?
A central role, because steel is needed for a great many products. This applies, for example, to car manufacturing, the construction industry, and mechanical engineering. But household appliances cannot do without it either. Not all steel is the same: companies offer more than 2,500 types of steel – for example, for wires, sheets, rods, pipes, and rails.
Around 80,000 people are directly employed in the steel-producing industry. Major companies include Thyssenkrupp Steel, Salzgitter, ArcelorMittal, Dillinger, and Saarstahl. According to the industry association Wirtschaftsvereinigung Stahl, around four million people work in so-called steel-intensive industries in the next stage of the value chain.
A good 37 million tons of crude steel were produced in Germany in 2024. For the third year in a row, the volume was below the 40 million mark, at which point the industry speaks of a recession. Most steel is produced in Duisburg.
Germany is by far the largest producer of crude steel in Europe. In 2024, more than a quarter of EU production (just under 130 million tons) was produced in this country. In terms of volume, German steel ranks seventh worldwide. In 2024, China took the top spot by a wide margin with 1,005 million tons, ahead of India (149 million tons).
What are the most pressing problems?
The industry complains about unfair competitive conditions. "Massively increasing and often unfairly subsidized imports are pushing their way onto the EU market," says the industry association. Every third ton of steel used in the EU now comes from third countries. On the other hand, high energy prices are causing companies serious difficulties. Finally, the economic downturn has also had an impact in recent years. According to the industry association, the market volume has fallen by around a third since 2017. Added to this are the billions in costs for converting production processes to climate neutrality.
Why should steel production become more climate-friendly?
Because the steel industry emits extremely high levels of climate-damaging carbon dioxide. Around seven percent of total CO2 emissions in Germany are attributable to the industry. This is mainly due to traditional pig iron production in blast furnaces, which requires a great deal of carbon in the form of coke, for example. This provides heat and removes oxygen from the iron ore, a process known as reduction. Currently, around 70 percent of pig iron is produced in blast furnaces. For the remaining 30 percent, scrap metal is melted down in large, electrically powered furnaces.
Is it possible to produce steel in a more climate-friendly way?
Yes. Primarily by using a process that ideally employs climate-friendly hydrogen instead of coal and coke. The waste product is then water rather than carbon dioxide. The plants are not called blast furnaces, but direct reduction plants.
The problem is that huge amounts of hydrogen are needed, which are not yet available. As a transitional measure, new plants will therefore be powered by natural gas, as ArcelorMittal has been doing for a long time at a plant in Hamburg. New plants, requiring billions in government aid, are under construction, for example in Duisburg and Salzgitter. The increased use of wind and solar power in electric furnaces also helps to reduce greenhouse gas emissions.
What can politicians do?
The federal government wants to support the industry—partly because without its own steel industry, Germany would be dependent on countries such as China. Firstly, the so-called electricity price compensation is to be extended beyond 2030, as announced by Economics Minister Reiche. This will indirectly relieve companies of the costs of CO2 emissions trading.
In addition, an industrial electricity price is to be introduced on January 1, 2026. Government subsidies are intended to significantly reduce the price of electricity for energy-intensive companies. Under EU rules, it has not been possible for companies to benefit from both forms of assistance, i.e., electricity price compensation and the industrial electricity price. The German government was able to push for a change at the EU level.
Relief from electricity grid fees in 2026 has already been decided, although the steel industry is insisting on a permanent reduction. There could be more flexibility in the use of hydrogen. The aim is actually to use "green" hydrogen, which is produced from renewable energies. However, this is still very expensive and not available in sufficient quantities. For this reason, "blue" hydrogen, which is produced from natural gas, could be used initially.
However, the German government cannot decide on many important measures on its own, as they are decided at EU level. This mainly concerns trade policy.
Higher tariffs to protect the EU steel industry under discussion
The EU Commission has proposed protecting the domestic steel industry from cheap competition from countries such as China with significantly higher tariffs. In addition, the volume of duty-free imports is to be almost halved. Specifically, the tariff rate for imports exceeding this volume is to be doubled to 50 percent. This could have an impact on the difficult negotiations with the US, which levies import duties of 50 percent on steel and aluminum.
Finance Minister Klingbeil also called for a complete end to all steel imports from Russia. Steel slabs produced in Russia and further processed in the EU are still exempt from sanctions.
Industry representative hopes for concrete results from the steel summit
Marie Jaroni, head of Germany's largest steel manufacturer, Thyssenkrupp Steel Europe (TKSE), is pushing for tariffs on steel imports from China and state aid for electricity prices. The manager also advocates quotas for state investments. "The billions that are being invested in the infrastructure package should be linked to the requirement that steel from the EU be used primarily," Jaroni told the "Rheinische Post" newspaper. "It cannot be that German taxpayers' billions ultimately end up mainly with manufacturers in Asia."/tob/DP/zb
