A logo of steel manufacturer ArcelorMittal is seen at the company's site in Basse-Indre near Nantes, France, April 24, 2025.
The company declined 1.3 billion euros ($1.49 billion) in government subsidies intended to support the transition of the Bremen and Eisenhuettenstadt facilities to hydrogen-powered furnaces, which rely on electricity from renewable sources. This move highlights challenges in Germany’s industrial sector, which has faced difficulties adapting to shifts in energy availability following the loss of Russian gas supplies.
ArcelorMittal noted that energy costs in Germany remain elevated compared to international benchmarks and neighboring countries. The company pointed to recent investments in electric arc furnaces in countries with more stable and cost-competitive electricity, such as nuclear-powered France, as a contrast.
“Electricity prices in Germany are high both by international standards and compared to neighbouring countries,” ArcelorMittal stated. The company also emphasized that the European steel industry faces significant pressure from increased imports, which are impacting local producers’ market share.
Germany has been expanding its renewable energy infrastructure to reduce reliance on traditional energy sources. However, the transition has been complex and costly for industries accustomed to natural gas. Despite government incentives to encourage the adoption of hydrogen-based technologies, economic challenges persist.
“The European steel industry is under unprecedented pressure to preserve its competitiveness,” said Geert van Poelvoorde, head of ArcelorMittal Europe. “And that’s before the extra costs of decarbonisation.”
Van Poelvoorde urged the European Commission to address the issue of steel imports, describing foreign competition as a critical challenge for the industry. He called for measures to limit certain steel imports to support European producers.
The decision reflects broader difficulties in balancing environmental goals with economic realities in Germany’s industrial sector. While the current government has expressed concerns about the previous administration’s energy policies, it has yet to outline a significantly different strategy to address these challenges.
