Swiss government offers assistance to steelmakers

In March, the retroactive introduction of transitional support was announced

Steel and aluminum producers in Switzerland are offered the right to state aid – four-year government subsidies – from the beginning of this year (retroactively) until the end of 2028. This is reported by Kallanish.

Companies will receive a discount on the fee for using the power grid. In the first year, it will be reduced by 50%, in the second – by 37.5%, in the third – by 25%, and by 12.5% in the fourth. The government will spend about 37 million Swiss francs ($42 million).

It is worth noting that the urgent support law was approved by the country’s parliament last year. In March this year, the Swiss Federal Council announced the retroactive introduction of this support.

Given the strong reservations about state aid to a specific industry, the project is subject to strict conditions. In particular, the maintenance of the company in Switzerland must be supported by a business plan, and no dividends or special and variable remuneration is expected to be distributed.

In recent years, high electricity prices and grid fees have been a major cause of concern for the international competitiveness of companies such as Swiss Steel and Stahl Gerlafingen. For both, production and job cuts have become a problem.

Despite the difficult situation of the Swiss steel companies, the government’s proposal did not cause a significant resonance and may not be clearly welcomed by the intended beneficiaries.

As GMK Center reported earlier, British steelmakers are calling on the government to help the industry with electricity prices. The UK Steel industry association calls for the introduction of a bilateral contract for difference mechanism. The association notes that unlike many steel-producing countries such as France, Italy, Spain and the UAE, the UK has no mechanism to protect energy-intensive industries from high wholesale prices.