(Gemini Audio)
(de-news.net) – On the eve of the Berlin Steel Summit, Chancellor Friedrich Merz has reaffirmed the strategic significance of the steel industry for Germany’s economic resilience and industrial sovereignty. He emphasized the imperative of maintaining a competitive, future-oriented, and technologically advanced steel sector, which he described as essential for securing employment, sustaining value chains, and preserving national prosperity. His remarks set the tone for a high-stakes meeting at the Federal Chancellery, where federal ministers, state premiers, and industry representatives are expected to convene.
Lower Saxony’s Minister-President Olaf Lies (SPD) warned against a purely symbolic gathering, urging participants to deliver concrete outcomes. He stressed the need for a robust steel pact that would promote fair international trade, ensure affordable energy supply, and establish lead markets for climate-neutral steel. Lies pointed to the sector’s precarious position, exacerbated by the ongoing trade tensions between the United States and China, which have placed additional pressure on European producers.
Bremen’s Mayor Andreas Bovenschulte (SPD) called on the Federal Government to endorse the European Commission’s proposal to halve steel import quotas. He argued that such a measure is vital for the survival of the European steel industry and urged Berlin to leverage its influence within the EU to secure the proposal’s adoption. Bovenschulte also criticized the EU’s previous conciliatory approach toward the United States and advocated for renewed negotiations concerning the 50% tariffs imposed on European steel exports. While acknowledging the global nature of industrial policy, he cautioned against indiscriminate punitive tariffs on Chinese imports, advocating instead for a nuanced assessment of foreign subsidies.
In alignment with Finance Minister Lars Klingbeil (SPD), Bovenschulte supported a complete ban on Russian steel imports, citing concerns that such imports undermine EU sanctions and indirectly contribute to financing the war in Ukraine. He also criticized the current three-year framework for industrial electricity pricing, arguing that it fails to provide the long-term certainty required for investment planning. He proposed a guaranteed industrial electricity price of approximately five cents per kilowatt-hour over a minimum ten-year period to foster stability and encourage industrial transformation.
Meanwhile, in a coordinated effort, five German states—Bremen, Lower Saxony, North Rhine-Westphalia, Saxony, and Saarland—issued a joint declaration advocating for decisive EU action on steel trade. They proposed a quota-based tariff system with penalties of at least 50 percent, mirroring U.S. levels, and called for comprehensive coverage across the entire steel value chain, including semi-finished and processed products. The states emphasized the urgency of adopting the EU’s proposed trade instrument to provide planning security and protect the competitiveness of downstream industries within the internal market.
The declaration also called for the full implementation of the EU’s carbon border adjustment mechanism by January 2026. In the absence of such a mechanism, the states argued that free emission allowances should remain in place to prevent undue burdens on domestic producers. They further stressed the importance of securing a reliable hydrogen supply and stable electricity contracts to enable the sector’s decarbonization, warning that emissions trading must not become a catalyst for industrial decline.
According to the German Economic Institute (IW), approximately 605,000 jobs are directly or indirectly linked to the steel industry, including roles in supply chains and customer sectors. The sector’s downturn has been intensified by the war in Ukraine and rising energy costs. IW data indicates that while production costs in 2019 were roughly 440 euros per ton—comparable to U.S. levels—they surged to 550 euros per ton by 2023. With the transition to hydrogen-based green steel, costs could escalate further to 810 euros per ton. The institute called for targeted support through climate protection contracts and infrastructure investments, noting that current industrial electricity subsidies offer only limited relief. Without comprehensive reform, both employment and climate objectives are at risk.
In a further development, Deutsche Bahn has initiated a pilot project to incorporate low-emission steel into its rail infrastructure. The state-owned railway company signed a supply agreement with Saarstahl for approximately 1,000 tons of climate-friendly rails. Production will take place at Saarstahl’s Ascoval facility in France, where electric arc furnace technology is used to recycle scrap metal into new steel. This method reportedly reduces CO₂ emissions by up to 70 percent compared to conventional blast furnace techniques, marking a significant step toward sustainable infrastructure development.
