According to a report published by the German Institute of Economics (IW Köln), Germany must maintain competitive domestic production in energy-intensive industries such as the steel industry, while ensuring a transition to production that does not affect climatic conditions.
The report says that energy-intensive industries are currently facing weak demand, global overcapacity, and trade policy barriers, while demanding climate-neutral transformations. However, the necessary technical, infrastructural and regulatory conditions for such a transformation are not yet sufficiently developed. ,
,IW Köln highlighted the importance of integrated industrial value chains in Germany, noting that in 2023, the production of cast iron and steel generated intermediate costs of more than 80 billion euros. Although most of these resources were devoted to steel processing, more than 22 billion euros were supplied to industries such as metal products, automotive and mechanical engineering. According to the institute, the weakening of individual links in this interconnected industrial network can affect the entire value chain and increase the risks of relocation. ,
,About 5.5 million jobs are linked to the value chain in the steel industry. , ,
,The report notes that the steel industry is a particularly good example of the challenges faced by Germany's energy-intensive industries. About 605,000 jobs in Germany are directly dependent on the steel industry through suppliers and customers, while about 5.5 million jobs are linked to steel in the overall value chain. ,
,Germany's steel production in 2025 remained below 40 million tons for the fourth year in a row, amid weak domestic and external demand, as well as a significant excess of production capacity in the global market. According to IW Köln, Chinese steel producers, in particular, receive substantial government support, which contributes to lower global steel prices and profitability. These economic conditions make it difficult for the planned transition to climate-friendly steel production. ,
,About half of the announced environmentally friendly steel production projects are facing delays. , ,
,At the same time, the report notes that the development of climate-friendly steelmaking facilities is progressing more slowly than initially anticipated worldwide, and about half of the announced environmentally friendly steel projects are facing delays. High investment costs,
