In a decisive move before its summer recess, Germany’s Federal Council (Bundesrat) has backed a resolution by North Rhine-Westphalia demanding the rapid implementation of the European Steel and Metals Action Plan (ESMAP). The proposal, which also calls for a national steel summit, has received support from the states of Saarland, Bremen, and Lower Saxony.
Kerstin Maria Rippel, managing director of the German Steel Federation (WV Stahl), welcomed the resolution. She emphasized that the federal government must now fulfill its coalition commitments and push for ESMAP adaptation at the EU level to secure the future of Germany’s steel industry.
Key challenges facing Germany’s steel sector:
1. Foreign trade defense urgently needed
Germany’s steel producers face mounting import pressure and global overcapacity, leading to a sharp decline in production efficiency and competitiveness. Around one-third of steel consumed in the EU is imported, 50 percent US tariffs on steel remain in place, domestic demand remains historically low, and production facilities are underutilized. The OECD projects global steel overcapacity will rise from 600 million mt in 2024 to over 700 million mt by 2027. Therefore, a strong, long-term EU foreign trade defense instrument is required to shield local producers and secure jobs.
2. Competitive electricity pricing essential
Electric arc furnace (EAF) steelmaking in Germany is being threatened by high electricity and grid costs. Germany’s industrial electricity prices are well above international levels. A reduction in transmission charges, promised long ago, is yet to materialize. Delays worsen competitiveness and climate goals. Immediate implementation of industrial electricity pricing models, similar to France and Italy, and reduction of network fees are essential.
3. Green transformation for domestic growth
The development of lead markets for low-emission raw materials produced in Germany and the EU presents a key opportunity to drive economic growth and enhance the strategic resilience of the German steel industry. Germany’s special infrastructure and climate fund can revitalize the economy provided that policy focuses on local value creation.
Industry warning: Time is running out
Ms. Rippel issued a strong warning about the economic and social risks of continued inaction. Each month of delay weakens Germany’s competitive edge and puts thousands of jobs at risk, she noted. She also stressed that without stimulating domestic demand and ensuring fair competition, Germany and the EU risk losing global industrial leadership in green steel and sustainable materials.