Germany’s steel industry is at a turning point – WV Stahl

Stable framework conditions are necessary for investments in decarbonization and technological modernization

Last year, Germany’s steel industry remained under significant pressure due to weak demand from key customers, rising imports, high energy costs, and challenges related to decarbonization. This is according to the annual report published by the German Steel Federation (WV Stahl).

As WV Stahl President Gunnar Grebler noted, the German steel sector is at a turning point, driven by the need to achieve climate neutrality while maintaining global competitiveness. According to him, steel producers are technologically capable and ready to transition to low-carbon steel production, but stable framework conditions are still lacking.

As Grebler explained, energy prices and extremely weak demand from key sectors—primarily the automotive industry, mechanical engineering, and equipment manufacturing—are putting a strain on the country’s steel mills. At the same time, many companies are facing the need to make significant investments in new capacity and climate-friendly production processes. The path to transformation is capital-intensive and risky—and it pays off only with a focused and reliable policy framework. The president of WV Stahl emphasized: the industry does not need new promises, but rather well-founded decisions.

The association forecasts that if the right political decisions are made, 2026 could be the year when the work done earlier pays off.

In particular, WV Stahl welcomed Germany’s decision to subsidize transmission grid fees starting this year. As noted, these fees have risen by approximately 130% and resulted in additional annual costs for the sector of around €300 million. However, the current industrial electricity price support scheme still provides insufficient relief due to restrictions imposed by EU state aid rules.

The association has once again called for the establishment of a competitive price for industrial electricity at €50/MWh, including grid usage fees and additional charges.

In 2025, steel production in Germany amounted to 34.1 million tons, which is below the 40-million-ton threshold considered necessary for sustainable capacity utilization. According to the industry association, approximately 70% of the country’s steel production is carried out via the basic oxygen process, with the remainder coming from electric arc furnaces.

As a reminder, Germany produced 12.49 million tons of steel in January–April 2026, a 9.1% increase year-on-year.