Germany’s government has said it will protect the country’s steel industry by ensuring lower electricity prices and advocating for improvements to EU measures, such as changes to the union’s carbon border tariff system.
“We will make every effort to reduce energy prices in Germany,” said chancellor Friedrich Merz after a meeting with steel sector representatives in Berlin. “Without an effective reduction in electricity prices, this industry is not viable.” Electricity price subsidies in the form of an “industry power price” would provide relief for three years from 2026. Merz said there were good prospects for the EU to approve the state aid scheme soon.
The German government is in the final stage of negotiations with the European Commission concerning the details of electricity price incentives for industrial companies, and expects the system to start in January 2026. But industry sources told Spiegel magazine they didn't expect the steel sector to benefit from the planned industry power price because energy-intensive companies already receive support via the so-called power price compensation, which provides relief from emission trading costs.
The government also said it would push for action at EU level, including trade protection instruments against dumping or subsidies to reduce current import volumes, welcoming related EU proposals. In addition, Germany advocates reforming the Carbon Border Adjustment Mechanism (CBAM), which requires importers in certain sectors to pay when their products have a higher carbon footprint than EU-made goods.
