Pressure to revisit some of the pillars of European climate policy is no longer coming solely from parties critical of the Green Deal. It is now emerging from the heart of Germany’s industrial economy.
Over recent months, the leading associations representing the steel and chemical industries have intensified their lobbying efforts in Berlin and Brussels to modify part of the regulatory timetable planned for this decade. Their objective is not to abandon climate neutrality but to slow down certain measures that they consider incompatible with the current state of European industry.
The concern is focused particularly on two sectors that have historically been essential to the German economy. Steel remains a key component of the automotive, construction, and machinery manufacturing industries, while the chemical sector constitutes one of the country’s largest industrial bases and one of its main export industries.
The German Steel Federation (WV Stahl) and the European steel association EUROFER argue that rising energy costs and the progressive tightening of climate regulations are undermining the competitiveness of European producers compared with rivals in Asia, the Middle East, and the United States.
Among their main demands is a significant reduction in electricity costs for industry, including lower grid fees and state support mechanisms aimed at maintaining primary steel production in Germany.
They are also calling for changes to the Carbon Border Adjustment Mechanism (CBAM), the system designed by Brussels to impose carbon-related charges on imports from countries with less stringent climate standards.
The industry argues that CBAM still contains major loopholes and fears that European producers could lose competitiveness in international markets as the free emission allowances under the EU Emissions Trading System (ETS) are gradually phased out.
The chemical industry has raised similar concerns.
The German Chemical Industry Association (VCI) has warned that some of the planned reforms to the European carbon market could exceed the adaptation capacity of many companies in the sector. Among other measures, it is calling for the preservation of compensation mechanisms, lower regulatory costs, and a review of certain environmental obligations that it considers particularly burdensome for European competitiveness.
These demands have gained political traction alongside the launch of the ‘Chemie Agenda 2045,’ a package promoted by the German government to support the sector’s transformation through subsidies, lower energy costs, and regulatory simplification.
Germany’s steel industry directly employs between 80,000 and 85,000 workers. However, the sector’s economic impact extends far beyond those figures, as steel-related value chains support around four million industrial jobs across Germany.
The IG Metall trade union recently warned that tens of thousands of jobs could be affected by the sector’s current crisis. The most prominent example is Thyssenkrupp, which has announced the elimination of around 11,000 positions within its steel division as part of a broader restructuring process.
Germany’s chemical industry employs approximately 480,000 people. Although employment has remained relatively stable in recent years, industry associations acknowledge a downward trend linked to declining production and competitiveness. According to VCI data, the sector lost roughly 2,400 jobs during 2025 and faces a highly uncertain 2026.
Some business leaders, including Evonik CEO Christian Kullmann, have gone even further, warning that as many as 200,000 industrial jobs could be threatened if energy costs and the burdens associated with the European emissions trading system continue to rise simultaneously.
Added to this is the ongoing process of automation and robotization across production systems. The combined impact could permanently reshape Germany’s industrial labor market.
