In Germany, major steel companies have halted or postponed key green transformation projects since 2025: ArcelorMittal has put its planned climate-neutral restructuring at its Hamburg site on hold, Salzgitter is slowing down until at least 2028/2029, and Thyssenkrupp is linking investments to a cost-cutting program. The triggers are the lack of and high cost of green hydrogen, volatile and sometimes high electricity prices, as well as price and demand pressures in the market. Furthermore, US tariffs are exacerbating the situation, as exports to the US have been subject to additional duties of 50 percent since March 2025. This puts around 80,000 jobs in the sector at risk, while making Germany’s climate targets for 2030 and climate neutrality by 2045 more difficult to achieve.(deutschlandfunkkultur: 17.02.26)
Green Transformation – Risk Beats Vision
ArcelorMittal wanted to develop the Hamburg steel plant into Germany’s first climate-neutral production facility, but the company halted the plan at the beginning of 2025. Plant manager Uwe Braun describes the change as follows: “At first glance, it all sounded fantastic, and we were very enthusiastic, but when you really read through it line by line and see the risks involved, I see… no basis for continuing for the time being.” This statement marks a new guiding principle: risk first, then transformation. Thus, a former flagship project becomes a warning signal.
Salzgitter also put the brakes on due to changing circumstances. CEO Gunnar Gröbler said in September 2025: “What’s difficult is when investment decisions have been made and then the rules of the game change.” The company plans to review its investment options in 2028 or 2029. This delays the green transformation, while policymakers demand immediate results.
Riesa shows progress, but electricity prices are the deciding factor
In Riesa, Saxony, Feralpi works almost exclusively with scrap metal, making the plant a prime example of the recycling industry. General Manager Uwe Reinicke says: “We are 98 percent a recycling company,” and he emphasizes: “Our primary raw material… is scrap metal.” Feralpi operates an electric arc furnace, which emits significantly less CO₂ than blast furnaces. Nevertheless, the operation remains vulnerable because electricity costs are becoming a major concern.
Electricity prices have risen sharply and fluctuate, so Feralpi shuts down the furnace on days when prices are high. Reinicke describes this as an operational necessity; otherwise, production would become too expensive. This means that the more climate-friendly route is precisely what’s dependent on the energy market, while the green transformation actually needs to accelerate. At the same time, a drop in steel prices is squeezing margins, and investments continue.
€220 million for a flagship rolling mill, but the calculations are shaky
Feralpi invested €220 million in a new rolling mill, including a substation. The company calls it the first emission-free rolling mill in Germany. According to the company, this part of the production process operates without fossil fuels and is CO₂-neutral because the steel billets hardly require reheating. This saves energy, and at the same time, CO₂ emissions are reduced. However, Reinicke says the investment will only pay off in the long term, but the economic situation remains difficult.
This illustrates the fundamental problem of the green transformation: the technology exists, but financing depends on market prices. If steel remains cheap and electricity expensive, the calculations tip. Then even a flagship project becomes a risk.
Hydrogen Shortage, Tariff Shock, Slump in Demand
The conversion of large blast furnace plants aimed at green hydrogen, but climate-neutral hydrogen is insufficiently available and too expensive. This disrupts many calculations, causing corporations to postpone projects. Foreign trade is also a burden, as exports to the US have been subject to a 50 percent surcharge since March 2025. This makes German steel more expensive, and sales are declining.
Domestic demand is also lacking, as less construction means less need for steel. Economist Patrick Kaczmaczek says that order intake is at its lowest level in 30 years, and cheap imports from Asia are flooding the market. Companies complain about government-subsidized competition while bearing high energy and conversion costs themselves. In this situation, the green transformation is being pushed to the back burner in many boardrooms.
Industrial Electricity Price 2026: Aid with Hurdles, Uncertainty Remains
At the beginning of 2026, the German government introduced the industrial electricity price and capped grid fees to provide relief to energy-intensive companies. The target is around five cents per kilowatt-hour, but this regulation only applies from 2026 to 2028. Without it, companies will pay at least twice as much. Other instruments exist in parallel, but some cannot be combined.
Reinicke criticizes the current practice: “As it is currently structured, it will be difficult” for Feralpi to use the industrial electricity price in addition to electricity price compensation. He calls the regulation “very bureaucratic” and “not pragmatic enough” because requirements and documentation make the application process difficult. This means that relief does not automatically reach those who are constantly interrupting production due to electricity shortages, and this prolongs the uncertainty.
Reinicke Government, EU, and Procurement: Insufficient Demand to Justify the Premium
State Secretary Gitta Connemann says the government supports companies, but it cannot force subsidies. “The truth is that not every company is currently willing or able to take this route,” she explains. Michael Kellner, on the other hand, calls for more demand through government procurement and criticizes the current scale of orders. Regarding the German railway’s order of green steel for 22 kilometers of track, he says: “Great, congratulations. We’re now in 2026 and we have 22 kilometers.”
At the EU level, the carbon border adjustment mechanism CBAM is intended to make imported steel with high CO₂ emissions more expensive, so that EU steel is not disadvantaged. Bernd Lange (SPD) says: “I don’t want to restrict production, I want to equalize prices.” Nevertheless, fears of relocation are growing. Two out of three industrial companies mentioned a move abroad in a survey by the Federation of German Industries (BDI) and Deloitte, which could result in a loss of expertise. That is precisely why the decision now will determine whether Germany remains industrially resilient or continues to postpone the green transformation.