EU steelmakers demand electricity price cut to safeguard the bloc’s competitiveness
European steelmakers called on the EU to cut electricity prices to around Eur50/MWh to safeguard the bloc’s industrial competitiveness and enable investment in low-carbon steel production, warning that persistently high power costs are driving investment decisions away from the region.
Eurofer, the European Steel Association, backed the broader industry call to action on Feb. 11 that demands urgent EU measures to reduce electricity prices, which the group said have become a major barrier to electrification and decarbonization in the steel sector. The appeal comes ahead of an EU leaders’ retreat on Feb. 12, where industrial policy is expected to be discussed.
Eurofer said restoring electricity prices closer to pre-2021 levels of Eur44/MWh, before the energy crisis, is essential for strengthening Europe’s steel industry and protecting industrial value chains. Current power prices, inflated by high taxes and carbon costs, are threatening investment decisions that steelmakers are making now, the association said.
“Steel is at the heart of Europe’s industrial ambition, but it is being held back by sky-high electricity prices and costs,” Henrik Adam, president of Eurofer and executive chairman of Tata Steel Netherlands Holding, said. “If the EU wants investment in low-carbon steel to happen in Europe, it must deliver total electricity costs closer to Eur50/MWh – across all member states.”
The steel industry’s concerns reflect broader worries about Europe’s industrial competitiveness as manufacturers face higher energy costs than rivals in other regions. For steelmakers, electricity is a particularly critical input as the sector transitions toward electric arc furnaces and other low-carbon production methods that require significant power consumption.
Eurofer has repeatedly urged Europe to address this critical issue for the steel industry, as short-term support measures are needed to maintain steel production and investment in Europe while longer-term structural reforms are implemented to decouple electricity prices from fossil fuel prices. Without effective relief from high power costs, investment will shift to other regions and European capacity will be lost, the group said.
“Steelmakers are taking decisions now,” Axel Eggert, director-general of Eurofer, said. “Without effective relief from high electricity prices, investment will move elsewhere and capacity will be lost. Keeping steel production in Europe is not just an industrial issue – it is essential for Europe’s economic security and strategic autonomy.”
The call to action was adopted by European companies and industries in Antwerp and was shared just before the EU leaders’ retreat. Eurofer was represented at the Antwerp event by two of its vice-presidents, Geert Van Poelvoorde, CEO of ArcelorMittal Europe, and Mario Arvedi Caldonazzo, CEO of Arvedi Group.
Germany to halve grid fees in 2026, but steelmakers demand permanent solutions
Germany’s four transmission system operators have released preliminary nationwide grid fees for 2026, showing that grid charges will be halved thanks to a planned €6.5 billion federal subsidy. The measure will be financed through the Climate and Transformation Fund and is currently awaiting parliamentary approval.
Under the proposal, the average grid fee will fall from 6.65 ct/kWh to 2.86 ct/kWh. The government hopes this temporary subsidy will alleviate some of the energy-cost pressures weighing on energy-intensive industries, including steelmaking.
Steel industry welcomes the move but warns of short-term fix
The German Steel Federation (WV Stahl) has described the planned reduction as “urgently needed and long overdue relief.” Managing director Kerstin Maria Rippel emphasized that soaring grid fees over the past two years have severely hurt the industry’s international competitiveness, coming at a time when mills are struggling with high energy costs, global overcapacity, and weak domestic demand.
German steel producers have experienced a 130 percent surge in transmission fees since 2023, adding roughly €300 million per year in extra costs. These grid fees are compounded by wholesale electricity prices that remain well above levels in other major steel-producing countries, such as France or the US.
WV Stahl argues that, while the 2026 subsidy is a necessary step, limiting the measure to a single year fails to provide the stability needed for industrial investment decisions.
Industry calls for long-term planning security
The federation has urged lawmakers to extend grid fee relief beyond 2026. Year-by-year political decisions, it warns, create uncertainty that deters capital investment, particularly in green steel transformation projects that require long-term cost predictability.
“We call on the members of the German Bundestag to clarify that the grid cost relief will also apply beyond 2026 and into subsequent years,” Rippel said, adding, “Annual individual decisions mean annual uncertainty, and that is poison for companies’ investment decisions. In times like these, companies need long-term planning security to remain competitive and become climate neutral.”
Structural challenges require broader reforms
WV Stahl also points out that grid fees are structurally high due to massive grid expansion investments, which will continue over the coming decades as Germany integrates more renewable power. Combined with relatively expensive wholesale electricity, these costs risk putting domestic steel producers at a structural disadvantage compared to their global competitors.
The federation reiterated its call for a predictable, internationally competitive industrial power price, with a reliable and permanent cap on grid charges seen as a critical first step.
Swiss government offers subsidies to steelmakers
Steel and aluminium companies in Switzerland are eligible for state aid from the start of this year retroactively until the end of 2028, Kallanish notes.
The companies will benefit from a rebate on electricity grid usage charges. Fees will be reduced by 50% in the first year, 37.5% in the second, 25% in the third and 12.5% in the fourth. The costs for the government amount to some CHF37 million ($42m), according to Swiss public information portal swissinfo.ch.
High electricity costs and grid fees in recent years have been the main cause of concern of the country’s to steelmakers, Swiss Steel and Stahl Gerlafingen, to keep up in international competition. Production cutbacks and job cuts have been an issue at both companies.
National union Syna claims that the government’s offer has been made possible by worker protests over jobs since last autumn. Only in February, workers in one rally urged Swiss Steel to seize the government’s offer. This is not as understood as it appears at first.
The companies must comply with a number of requirements. They will have to submit a plan for the sustained preservation of production sites and jobs, and pledge investments. Swissinfo also notes that, in particular, they are prohibited from paying variable remuneration to members of management and the supervisory board.
Despite the dire state of Switzerland’s steelmakers, the government’s offer has not created major media waves, and might not be welcomed with open arms by the supposed beneficiary companies. Upon request from Kallanish, Swiss Steel confined itself to a brief statement saying: ”We have taken note of the decree, and will carefully examine if we will apply for it.”
Christian Koehl Germany
Soaring energy costs push Siderurgia Nacional to halt production
Portuguese long steel producer Siderurgia Nacional (SN), part of Grupo Megasa, has temporarily halted operations at its Seixal and Maia plants due to surging energy costs, Kallanish reports. The stoppage, initially planned to last until Friday, may be extended further.
“Soaring electricity prices have severely disrupted operations, making it impossible for the Seixal and Maia plants to maintain regular production schedules. Until now, the plants operated only when electricity costs per megawatt-hour were economically viable,” explains Megasa.
The company warns that such drastic production cuts are economically unsustainable for Portugal’s largest energy-intensive industry. SN directly employs 700 people, indirectly supports 3,500 jobs, and contributes €900 million ($947.9 million) in annual exports.
Megasa is investing in renewable energy projects to enhance decarbonisation and cost competitiveness, including the development of a photovoltaic park at the Maia plant. However, similar projects at Seixal remain stalled, pending approvals from local and national authorities. “These are strategic, forward-looking projects essential to the company and the local and national economy,” Megasa states.
The steelmaker also calls for clearer national and European energy regulations, highlighting its competitive disadvantage compared to other European countries, where energy-intensive industries benefit from tailored cost structures. Although Portugal approved legislation in 2022 to support such industries, it remains pending European Commission approval.
“Without swift action, deteriorating conditions could jeopardise the viability of Portugal’s steel industry,” Megasa warns.
Todor Kirkov Bulgaria
