Germany Boosts Steel Industry with Import Shields and New Electricity Pricing
The German government is taking decisive steps to shield its steel industry from cheap flights and boost domestic production. It's also working on a new electricity pricing scheme to aid energy-intensive companies, with plans to have it in place by 2026.
The steel sector is grappling with a perfect storm of issues: a slowdown in customer industries, soaring energy prices, cheap flights, and the costly shift to greener production. To tackle these challenges, the government is considering further protective measures and prioritizing domestic steel in major infrastructure projects, including railway expansion. A special fund of 500 billion euros could also be used to support domestic products.
The government is also working on an 'industrial electricity price' to help energy-intensive companies. This new pricing scheme aims to bring the electricity cost down to five cents per kilowatt hour, a significant drop from the current average of up to 18 cents for small and medium-sized industrial companies. The government is committed to implementing this price with 'all political determination' and aims to have it in place by the beginning of 2026, with refunds made retroactively in the 2027 budget. However, the EU Commission's approval is needed for direct state subsidies to lower electricity prices.
The German government is acting swiftly to stabilize the steel industry and strengthen Germany's industrial location. It's addressing the challenges head-on, from protecting the industry from cheap flights to implementing a new electricity pricing scheme. The success of these measures will depend on the EU Commission's approval and the government's ability to deliver on its promises.
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