(new: with statements after the summit)
BERLIN (dpa-AFX) – According to Chancellor Merz, the German steel industry is in a “crisis that threatens its existence” – a “steel summit” in the Chancellery should help: What can politicians do so 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) invited the prime ministers of the federal states with the steel industry, representatives of companies and employees, and cabinet colleagues to an exchange about this.
How did the “Steel Summit” go?
The cast shows how important the federal government took the “Stahl Summit”: In addition to Merz, Vice Chancellor and Finance Minister Lars Klingbeil (SPD), Economics Minister Katherina Reiche (CDU) and Labor Minister Bärbel Bas (SPD) were also there. The politicians from the federal and state governments spoke for more than two hours – and therefore longer than planned – with representatives of companies, employees and the IG Metall union.
What came out of the steel summit?
According to Chancellor Merz, there is great agreement about what needs to be done. After the meeting, the Chancellor went into three areas in more detail: The steel industry needs effective foreign trade protection, among other things because of diverted flows of goods from China that are flooding the markets because of US tariffs. A reduction in energy prices is also necessary. He referred to the federal government’s intention to introduce an industrial electricity price. However, this is still being negotiated with Brussels. Ultimately, one must ensure that European steel is preferred when purchasing. “We have to protect our markets and protect our manufacturers,” said the Chancellor.
Other participants also drew positive conclusions and emphasized the similarities. When it came to the topic of electricity price relief, IG Metall Vice President Jürgen Kerner spoke of a “clear signal that we are appearing with a united voice in Brussels, and not only the government and the prime ministers, but also we as social partners support this.”
What role does the steel industry play in Germany?
A central role because steel is required for many products. This applies, for example, to car manufacturing, the construction industry and mechanical engineering. But even household appliances can’t do without them. Not all steel is the same: The companies offer more than 2,500 types of steel – for example for wires, sheets, rods, pipes or rails.
Around 80,000 people are directly employed in the steel producing industry. Large companies include thyssenkrupp Steel, Salzgitter, ArcelorMittal, Dillinger and Saarstahl. According to the Steel Association, around four million people work in the next stage of the value chain in so-called steel-intensive industries.
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, beyond which the industry speaks of a recession. Most steel is produced in Duisburg.
In Europe, Germany is by far the largest producer of crude steel. In 2024, more than a quarter of EU production (almost 130 million tons) was produced in this country. In terms of volume, German steel is in seventh place 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 competition conditions. “Massively increasing and often unfairly subsidized imports are pushing into 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 problems for companies. 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. In addition, there are billions in costs for converting production processes towards climate neutrality.
Why should steel production become more climate-friendly?
Because the steel industry emits an extremely large amount of climate-damaging carbon dioxide. The industry accounts for around seven percent of the total CO2 emissions in Germany. This is primarily due to the classic production of pig iron in blast furnaces, which requires a lot of carbon, for example in the form of coke. It provides heat and removes oxygen from the iron ore, which is called reduction. Currently around 70 percent of pig iron is produced in blast furnaces. For the remaining 30 percent, scrap is melted down in large, electrically powered furnaces.
Can steel be produced in a more climate-friendly way?
Yes. Above all, by using a process that ideally uses climate-friendly hydrogen instead of coal and coke. Waste material is then not carbon dioxide, but water. The systems are not called blast furnaces, but rather direct reduction systems.
Problem: Huge amounts of hydrogen are needed, but they are not yet available. On a temporary basis, new plants should therefore be operated with natural gas, as ArcelorMittal has long been doing at a plant in Hamburg. New facilities supported by billions in state aid are under construction, for example in Duisburg and Salzgitter. The increased use of wind and solar power in electric ovens also helps to reduce greenhouse gas emissions.
The federal government went into more detail about the topic of hydrogen in a press release on the steel summit. It says they want to pragmatically advance the ramp-up of the hydrogen economy. “In order to decarbonize the steel industry into climate-friendly production, affordable hydrogen must be available in sufficient quantities.” They also want to push ahead with a faster expansion of the hydrogen core network “so that steel production facilities can be connected as quickly as possible and within the agreed schedules.”
What can politics actually do?
Even before the steel summit, it was clear that the federal government wanted to support the industry – also because without an independent steel industry, Germany would be dependent on countries like China. On the one hand, the so-called electricity price compensation is to be extended beyond 2030, as Economics Minister Reiche announced. Companies are indirectly relieved 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 noticeably reduce the price of electricity for energy-intensive companies. According to EU regulations, it is currently not actually possible for companies to benefit from both aid, i.e. electricity price compensation and the industrial electricity price. The federal government wants to change this: According to Finance Minister Klingbeil, industrial electricity prices and electricity price compensation should “work together”.
Relief for electricity network fees for 2026 has already been decided – with the steel industry insisting on a permanent reduction. There could be more flexibility in the use of hydrogen. The aim is actually “green” hydrogen, which is produced based on renewable energies. However, this is still very expensive and not available in sufficient quantities. That’s why “blue” hydrogen, which is produced from natural gas, could initially be used.
However, the federal government cannot decide on many important measures on its own – because they are decided at EU level. This is primarily about trade policy.
Higher tariffs to protect the EU steel industry are being discussed
The EU Commission has proposed protecting the domestic steel industry from cheap competition from countries like China with significantly higher tariffs. In addition, the amount of duty-free imports is to be almost halved. Specifically, the tariff rate for imports that exceed this should be doubled to 50 percent. This could have an impact on the difficult negotiations with the USA, which imposes import tariffs of 50 percent on steel and aluminum.
Finance Minister Klingbeil is also calling for a complete end to all steel imports from Russia. Steel slabs that are produced in Russia and processed in the EU are still exempt from sanctions. “I can’t explain to anyone that, on the one hand, we are looking for financial opportunities to continue supporting Ukraine and, on the other hand, even though the domestic steel market could afford this, we still import slabs from Russia. This must be stopped,” he said after the “Steel Summit”./tob/DP/nas