Climate-neutral steel production in Germany can be profitable

Transformation is achievable, a new study by Mannheim-based economists shows.

Despite high costs, climate-neutral steel production in Germany can hold its own against international competition – provided that policymakers establish a reliable regulatory framework. This is the conclusion arrived at in a new study by Prof. Tom Krebs, Ph.D., and Patrick Kaczmarczyk, Ph.D., of the University of Mannheim, which was commissioned by the Hans Böckler Foundation.
Among other things, the researchers recommend a long-term cap on the price of industrial electricity and hydrogen, government investment support for the conversion of steel production, and European procurement rules that give preference to steel produced in a climate-friendly manner. Furthermore, protective measures are needed, they conclude, against cheap imports that benefit from lower environmental and social standards or state subsidies.
According to the study’s authors, a competitive, climate-friendly steel industry is crucial to Germany’s economic resilience. It supplies key sectors such as construction, mechanical engineering and the automotive industry and thereby underpins a significant proportion of industrial value creation and employment.
Source: University of Mannheim