German ‘steel dialogue’ highlights competitive electricity supply importance
The German government will lobby the European Commission for measures to support the German steel industry, as its existence is under threat, while competitive electricity supply remains critical, German Chancellor Friedrich Merz said after the “c” he hosted in Berlin on Thursday.
“The European Commission’s [EC] recent proposals for effective protection of the steel industry are a step in the right direction,” he said. Meanwhile, “without a significant reduction in energy costs, this [steel] industry in Germany would not be able to survive.”
“Politicians must do everything in their power to preserve the industry,” he continued, adding that local manufacturers should be protected and their transformation to climate-neutral production supported.
The German government has already implemented steel industry support measures. These include the abolition of the gas storage levy, the reduction of electricity tax to the EU minimum and the reduction of transmission grid charges, by €6.5 billion ($7.5 billion) in 2026 alone, the government notes.
It is also lobbying the European Commission for further relief in order to maintain the competitiveness of the steel industry and keep it on its path towards climate neutrality. Specifically, the so-called electricity price compensation is to be expanded and an industrial electricity price is to be implemented, Kallanish notes.
In contrast to the industrial electricity price, the electricity price compensation would provide additional relief for the steel industry through an increase in the aid intensity expressly demanded by the German government.
The government meanwhile continues to work intensively to end exemptions from sanctions for semi-finished steel imports from Russia, with plans to rigorously prosecute any attempts at circumvention.
German finance minister Lars Klingbeil said: “We must continue to reduce energy costs and improve the conditions of competition and give a clear European response to global overcapacity and dumping prices. We want a clear focus on climate-friendly quality steel from Germany and Europe. For our infrastructure and defence, in the automotive industry and in other important areas, we want domestic and European steel to be used as a priority.”
The steel dialogue participants agreed consistent measures are needed to address the negative effects of global overcapacity and the threat of trade diversion to the EU market. “To this end, the EU must exhaust its trade policy possibilities. What is needed is a robust, balanced successor to the safeguards that expires on 30 June 2026 that complies with WTO law,” the government notes.
In addition, it supports the EC’s efforts to negotiate easing US tariffs on steel and aluminium, including derivatives, so that European goods can be exported to the USA using duty-free quotas.
The German government advocates CBAM’s extension to downstream steel products and calls on the Commission to present a model for WTO-compliant export compensation in the near future. Should effective carbon leakage protection via CBAM or compensation payments prove unsuccessful, competitiveness should continue to be regulated through the free allocation of allowances, it adds.
The German Steel Association – WV Stahl – meanwhile called on politicians to act quickly. “There should be no more time lost and at least lower industrial electricity prices should be introduced as quickly as possible,” it urges.
WV Stahl is seeking fair competition instead of market distortion, and has called on the government to lobby Brussels to introduce robust trade protection against price dumping and overcapacity as quickly as possible.
“Competitive energy prices require a permanent reduction of network charges, continuation and deepening of electricity price compensation, and in the medium term, the introduction of a reliable industrial electricity price to keep investments in the country,” the association says.
Svetoslav Abrossimov Bulgaria
Friedrich Merz to call steel summit
German chancellor Friedrich Merz says he will schedule summits for the steel and automotive industries, which are both suffering from economic recession.
His announcement last week was in reaction to requests from numerous mills that have expressed the need for a high level meeting of industry with policymakers.
“I will very soon invite steelmaking companies as well as unions and [governments of] the states with steel production,” he said in a televised address. The aim is to retain a steel industry in Germany, he added.
The move has been welcomed by steel federation Wirtschaftsvereinigung Stahl. “Steel is not only the backbone of virtually all value chains, but also a cornerstone of our democracy and freedom,” says managing director Kerstin Maria Rippel.
In a statement sent to Kallanish upon request, she underlines that Europe’s future defence capabilities, competitive strength, and economic stability are at stake. “Securing the steel industry is therefore not only an economic policy task, but also a core component of the country’s security and resilience,” she notes.
Christian Koehl Germany
Germany to hold steel and automotive summits: IG Metall calls for concrete results
German Chancellor Friedrich Merz has announced plans to convene both a steel summit and an automotive summit to address mounting industry challenges.
According to official government press records, the summits will bring together steel producers, automotive manufacturers, trade unions, and federal states in the near future. The exact dates will be announced once preparations are complete.
IG Metall welcomes decision
The metalworkers’ union IG Metall welcomed the announcement, stressing that workers urgently need concrete solutions amid job losses, uncertainty, and lack of prospects across the steel and automotive industries.
Steel industry: need for concrete results
The steel summit carries particular importance for Duisburg, home to Europe’s largest steelmaking hub. Jürgen Kerner, vice chairman of IG Metall, emphasized that, while Merz’s commitment to Germany as a steel production hub is welcome, lip service is not enough, and tangible outcomes are needed rather than delays.
IG Metall’s key demands:
- Effective EU tariff regulations to counter steel dumping from China and Russia
- Competitive industrial electricity prices starting January 1, 2026
- Corporate responsibility to avoid plant closures and relocations
For Duisburg and beyond, IG Metall stressed that the summits must not become symbolic events. Kerner underlined that the challenges are well-known, and solutions already exist, while what is required now are concrete results that send a clear signal to employees and project jobs.
Automotive industry: jobs versus relocation
In the automotive sector, Christiane Benner, first chair of IG Metall, criticized recent job cuts and called on employers to end relocation debates. Instead, she urged cooperation with workers to ensure job security and foster innovation in the industry.
Eurofer, industriaALL call for Steel Summit, trade action
Eurofer and industriaALL have called on the European Commission to hold a “European Steel Summit” in January to discuss short-term emergency trade measures and a new “comprehensive EU trade initiative”.
Current EU trade defence instruments remain essential but are insufficient to tackle the spill-over of global steel overcapacity, the associations say in a joint letter to Commission President Ursula von der Leyen and new Executive Vice-President for Prosperity and Industrial Strategy Stéphane Séjourné.
Around 100 million tonnes of Chinese steel are flooding major markets at dumping prices, they continue. “However, the issue is bigger than only China”, they add, with South Asia, the Middle East, India, and Japan rerouting to the EU, depressing global steel prices, and endangering the survival of the steel sector and investments in the green transition.
“Import tariffication – taking into account WTO rules – is needed to tackle a double crisis, combining market-distorting export surges with extreme low prices,” the letter seen by Kallanish states.
The proposed summit should involve the steel social partners, Member States, and high-level officials from the EU institutions, with the aim of addressing the present crisis. It would be “instrumental” in preparing the announced “Steel and Metals Action Plan”, as well as other initiatives aiming to lower energy prices, secure the effectiveness of CBAM, access to raw materials, a Just Transition, and to boost investments, such as the Clean Industrial Deal, the associations note.
“The Summit would allow the leaders of industriAll Europe and EUROFER, trade union leaders and CEOs of EU steel companies the opportunity to provide you with a detailed update on the dramatic state of play in our sector and to exchange on recommendations contained in the social partners’ ‘Steel Action Plan’,” they conclude.
Adam Smith Poland
