IG Metall mobilizes the steel industry: Major demonstration in Berlin on June 12

At the center of the criticism is the concern about a weakening of the European Emissions Trading System (ETS 1). The Minister-President of Saarland, Anke Rehlinger (SPD), had warned in a letter to Federal Chancellor Friedrich Merz (CDU) against a softening of the system. There must be no role reversal on the political guardrails, she wrote. A weakening of the ETS would, in her assessment, jeopardize the billion-euro transformation of the Saarland steel industry toward green steel.

Dispute over emissions trading

In her letter, Rehlinger pointed out that the path of the Saarland steel industry had been irreversibly embarked upon – in reliance on pledges from the federal government and the EU Commission. Permits had been issued at record speed, the bulldozers were rolling, she formulated. Maintaining CO2 pricing was necessary so that the transformation would not be jeopardized. The background to the letter was positions taken by Federal Minister for Economic Affairs Katherina Reiche (CDU), who had raised the prospect of a review of emissions trading.

Rehlinger is receiving support from the SPD parliamentary group in the Bundestag. The deputy parliamentary group leader, Esra Limbacher, told the Rheinische Post that a full stop that some were calling for would not work and would have fatal consequences for Germany as an industrial location. The modernization of the steel industry was a question of destiny for Germany as an industrial location, and the framework of emissions trading had to be preserved for it.

Situation of the steel industry

The economic situation of German steel producers has been tense for years. Last year, crude steel production fell to 34.1 million tons – the lowest level since the financial crisis of 2009. According to IG Metall, the industry is struggling with high energy prices, cheap imports especially from China, and the costs of switching to more climate-friendly production processes. In addition, there are high US tariffs on steel imports and a crisis in important customer industries, particularly the automotive sector.

In April, the EU agreed to almost halve the duty-free import quota into the European Union and to impose a punitive tariff of 50 percent on imports exceeding that quota. This is intended to better protect the European market against overcapacity and dumping. The EU Commission intends to present proposals in July for the upcoming revision of the European Emissions Trading System – it is precisely this step that is now causing unease in the steel industry.

Broad alliance for the demonstration

IG Metall's second chair, Jürgen Kerner, said that politicians had – under pressure from the union – done quite a bit for the steel industry in recent months. They must not now stop halfway and must keep their promises. The federal government, meanwhile, has initiated an industrial electricity price designed to relieve energy-intensive sectors such as steel production. Industry associations see this as an important step but at the same time demand reliable framework conditions for the transformation.

Political representatives are also expected at the demonstration on June 12. The Greens parliamentary group in the Bundestag and The Left also announced their participation. The Greens party chair, Felix Banaszak, and The Left chair, Ines Schwerdtner, are expected in Berlin. The SPD parliamentary group in the Bundestag is also supporting Rehlinger's warning against a weakening of the ETS. This heralds a broad alliance of unions and parts of the opposition on the issue of industrial policy.

What is at stake

The steel industry in Germany is concentrated primarily in North Rhine-Westphalia, Lower Saxony, and Saarland. Many companies, including the steel sites in Saarland and Salzgitter, depend on maintaining the emissions trading framework in order to safeguard their investments in hydrogen-based production processes. At steel group Thyssenkrupp Steel Europe, a tough restructuring course is meanwhile underway, in the course of which around 11,000 jobs are to be cut or relocated.

With the demonstration, IG Metall says it wants to prevent the pledges made so far from being watered down. Should the EU Commission noticeably weaken ETS 1 in its July proposals, the union sees a chain reaction threatening: investments in more climate-friendly plants could lose value, site decisions could come back onto the agenda, and further jobs could be jeopardized. The rally in Berlin is therefore intended to send a clear signal to the federal government and the EU before the summer holidays.