German steelmakers are concerned about cuts to funding for the Climate and Transformation Fund

The German Steel Industry Association (WV Stahl) has warned that the planned cuts to funding for the Climate and Transformation Fund (KTF) – the economic plan for which is due to be presented shortly – could have negative consequences for the industry.

The industry association voiced its concerns following the government’s approval of the draft budget for 2027.

Kerstin Maria Rippel, CEO of WV Stahl, noted that the fact that €2.7 billion from the EU Emissions Trading System (EU ETS) revenues will be withdrawn from the KTF and channelled into the general budget instead is a warning sign for the sector.

“The planned consolidation of the Climate and Transformation Fund must not lead to the scrapping of measures to reduce energy prices, which the German government has only just begun to implement, as early as next year. On the contrary – funds from emissions trading generated by industrial companies must be channelled back in full to industry. If handled correctly, this will strengthen competitiveness and support the transition to climate neutrality,” she emphasised.

The association believes that if the redistribution of funds becomes a reality, it will nullify the positive measures regarding industrial electricity prices. The grid fee subsidy, electricity price compensation and the price of industrial electricity are indispensable for maintaining Germany’s competitiveness as an industrial region. They must therefore be continued, consolidated and expanded.

Kerstin Maria Rippel pointed out that the ultimate goal remains to keep the cost of electricity for industry at €50/MWh.

It should be noted that on 6 July, the German government approved the draft budget for 2027, increasing investment and defence spending. The reallocation of funds from the Climate and Transformation Fund was also criticised by the Green Party and environmental organisations.

As a reminder, it was reported in June that Germany is investing €565 million in the transition to a circular economy. German steelmakers supported the document, emphasising the need to introduce monitoring of scrap metal exports.