German steelmakers call for cheaper electricity and affordable hydrogen

European industry has faced a significant rise in energy prices in recent years, alongside ambitious decarbonisation plans. Heavy industry has been particularly challenged, especially sectors with high energy consumption and emissions. Several German federal states and industry associations have therefore issued a joint statement calling on the federal government to help kick-start the hydrogen economy.

The document says, according to Clean Energy Wire, that Germany’s steel industry has in some cases faced an existential crisis. It cites insufficient demand for low-carbon steel, relatively high electricity prices and grid fees, and “unfair international competition” as the main causes.

“The aim is to support the transformation of the steel industry while also safeguarding jobs and the sector’s competitiveness,” said 11 federal states and industry associations in the statement.

Some companies are already receiving certain forms of local support. One example is the federal state of North Rhine-Westphalia, which is supporting the green transformation of local giant Thyssen-Krupp Steel with 700 million euros. The support is also intended to help save jobs: according to the website, 25 of the 80 thousand people employed in the steel industry in Germany work in this federal state.

The website cites an article in the newspaper Handelsblatt, which says local industry is not relying solely on the federal government and its support. Industry representatives say that support is insufficient to ensure Germany remains an attractive industrial location in the long term.

“It is clearly essential to establish a steel pact at EU level during the first 100 days of the new European Commission,” Dennis Grimm of the Thyssen-Krupp Steel Group told Handelsblatt.

According to German Economy Minister Robert Habeck, Germany and the EU are global pioneers in decarbonising the steel industry. German steel, he said, is at the start of numerous supply chains, including those in the automotive and mechanical engineering industries, which are often drivers of the economy. In steel production, however, not only German manufacturers are facing very low-cost competition from China.