German steel association WV Stahl has raised an alarm over the government’s plan to redirect 2.7 billion euros from the Climate and Transformation Fund (KTF) to the general budget, warning that it could undermine the decarbonization of the steel industry and erode industrial competitiveness in Germany.
The planned budget reallocation, announced by the German government for 2027, is meant to help plug a fiscal hole that according to Tagesschau exceeds 100 billion euros, caused by weaker economic growth and lower tax revenues. The government has also signaled higher spending on defense due to the international situation, and introduced new taxes and spending cuts in social programs. The 2.7 billion euros in question come from revenues generated by the European Emissions Trading System (ETS), which were supposed to flow into the KTF but will now stay in the general budget.
A blow to energy price relief
The steel industry argues that the shift could cancel out recent positive measures on industrial electricity prices. The KTF currently funds subsidies for grid fees, electricity price compensations, and a reduced industrial power rate – instruments that WV Stahl says are essential to keep Germany competitive as a manufacturing location. The association has repeatedly called for a stable industrial electricity price of 50 euros per megawatt-hour, a level needed to secure investments and manage the transition to climate neutrality.
– The planned consolidation of the Climate and Transformation Fund must not lead to a reversal of the recently introduced measures to lower energy prices as early as next year – said Kerstin Maria Rippel, President of WV Stahl. – On the contrary: the revenues from emissions trading, generated by industrial companies, must be channeled back in full to industry. This is a condition for strengthening competitiveness and supporting the transformation towards climate neutrality.
The stakes for industrial transformation
The KTF is mainly funded through ETS revenues and federal budget allocations. For 2026, the Federal Ministry of Finance estimates the fund’s spending at 37.4 billion euros, including 10 billion euros from the Special Fund for Infrastructure and Climate Neutrality (SVIK). Besides promoting climate protection in buildings and industrial transformation, the KTF also supports climate-friendly mobility, hydrogen economy development, and natural climate protection measures. Since this year, the fund has also been used to finance reductions in grid fees for commercial and residential consumers.
WV Stahl warns that if the reallocation goes ahead, the instruments vital for Germany as an industrial location could be weakened or discontinued. The association insists that the energy price relief measures must be continued, consolidated, and expanded – not cut back. Without them, the steel industry’s ambitious decarbonization plans, including the shift to hydrogen-based steelmaking, could be put at risk.
Źródło: WNP.PL, Fot. PTWP
