Basis laid for transformation of the steel industry: Federal Government mobilises an additional €5 billion for the decarbonisation of Germany’s industrial sector

On 3 May 2021, the most senior representatives of the large German steel companies, the Association of Steel Producers, and the metalworkers’ union (IG Metall) met with Federal Minister Altmaier to discuss the progress made and the challenges remaining with regard to the implementation of the Steel Action Concept.

Said Federal Minister Peter Altmaier: “The Steel Action Concept has allowed us and all stakeholders to make a concerted start on the transformation of the steel industry and to launch a number of projects in the past months. During these months, we have succeeded in mobilising an additional approx. €5 billion for the decarbonisation of the steel industry in the period from 2022 to 2024. This marks an important step forward. But we are also well aware that the transformation of energy-intensive industries such as the steel industry is an ongoing and permanent task. It is something that can only work if there is close cooperation between the steel industry, the unions, and policy-makers.”

The steel industry is a key enabling industry for Germany. Its position as a basic materials industry gives it tremendous importance in value chains and in the German economy as a whole. At the same time, it generates more greenhouse gas emissions than any other sector of industry, meaning it has a special responsibility for climate action (the German steel industry produced 39.7 million tonnes of steel in 2018, causing emissions of 58.6 million tonnes of CO2).

The adoption of the Steel Action Concept by the Federal Cabinet in 2020 set an important mile stone in terms of industrial policy. In recent months, a dialogue process has taken place between steel companies, the Association of Steel Producers, the metalworkers’ union (IG Metall) and the federal ministries whose remits include this issue, so as to specify and implement the recommendations for action and the ideas laid out in the Steel Action Plan. Together, they have been making progress on some of the key points of the Steel Action Plan.

This includes the additional €5 billion raised for the decarbonisation of the industrial sector. Most of this sum will be made available through the ‘decarbonisation of the industrial sector’ funding programme, the Important Project of Common European Interest (IPCEI) on hydrogen, and a project piloting ‘carbon contracts for difference’.

For an overview on the progress made so far within the framework of the Steel Action Concept, please click here.