Germany’s steel industry faces collapse from high energy costs, prompting emergency measures and subsidy plans amid EU restrictions.

Germany’s industrial sector, especially steel, faces an existential crisis due to persistently high energy costs, with output down 25% since 2018 and electricity prices 70% above those in the U.S. and France. Chancellor Friedrich Merz declared a national emergency, calling for protectionist measures and a proposed €4 billion annual subsidy for energy-intensive industries starting in 2026, though EU state-aid rules limit support to 50% of energy costs for three years. The European Commission has blocked broader plans, while critics say the Green Deal’s climate ambitions are undermining competitiveness through costly regulations and bureaucratic burdens. The situation threatens up to 30,000 jobs and €50 billion in annual economic value, raising concerns about long-term industrial decline and taxpayer-funded subsidies.