German steel industry warns of the consequences of a natural gas embargo
by David Fleschen
The steel industry in Germany supports the German government's policy of breaking away from energy dependence on Russia as quickly as possible, establishing alternative supply routes and accelerating the expansion of renewable energies. It also supports the economic sanctions that have been introduced.
At the same time, the steel industry explicitly warns against the consequences of an embargo aimed in particular at natural gas. Without natural gas from Russia, steel production would not be possible at present. With 40 million tonnes of crude steel production, the steel industry is the largest producer in the EU and the eighth largest producer worldwide. Steel is also the basic material and starting point of almost all industrial value chains. An immediate import stop of Russian gas would therefore not only lead to production stoppages in the steel industry, but also to a collapse of industrial production in Germany and the EU. The consequences for Germany as an industrial location could therefore be burdensome in the long term. Economic models in which industrial plants are ramped up and down at will do not really make clear the risks of such a step.
Hans Jürgen Kerkhoff, President of the German Steel Federation, comments:
"The steel industry in Germany supports the sanctions against Russia. The unprecedented attack on peace in Europe relentlessly reveals that we need an energy policy that quickly reduces dependencies now and focuses more on security of supply. However, an import ban on natural gas supplies from Russia without secured alternatives would expose companies in the steel industry to the risk of forced shutdowns in the current situation. This would lead directly to production interruptions, short-time work and possibly job losses. Additional massive supply problems for steel processors up to the end customers would also be the consequence. Overall, there is a threat of permanent job losses and serious economic damage. Therefore, the steel industry stands behind the responsible policy of Federal Minister Habeck not to jeopardise security of supply by banning deliveries."
Accelerating the expansion of renewable energies and building a hydrogen economy are also crucial for the transformation of the steel industry towards climate-neutral production. However, this will take time. In the transition phase, the steel industry is imperatively dependent on the continuous supply of natural gas as well, which already leads to a significant reduction in CO2 emissions with the new production technologies.
Source: WV Stahl, Photo: Fotolia