05. 12. 2025
AUTHOR: Linda Kalcher and Tristan Beucler
This text was originally published by Focus.
Germany’s energy-intensive industries are facing an existential test. More than ever, they are in danger of falling behind in global competition – due to higher energy prices in Europe, unfairly subsidised competition from China, and US tariffs. A year ago, Mario Draghi, the former president of the European Central Bank, warned of a ” slow agony,” a final death throes.
The “slow agony” of industry
This stagnation does not stem from a lack of potential or clarity on how to shape economic recovery. European companies have developed technologies and materials that are highly competitive in a low-carbon economy. Germany is a pioneer in many of these fields of innovation . Some of the world’s leading heat pump manufacturers, such as Stiebel Eltron and Bosch Thermotechnik, are based here. By 2030, 400 GWh of battery production capacity are planned – placing Germany third worldwide behind the USA and China. The country also boasts the most low-carbon steel production projects in the EU, including a Salzgitter steel plant slated for decarbonisation by 2027. Expertise, capacity, and skilled workers are available – but political uncertainty is hindering investment. The agony is therefore rooted in the uncertain demand for low-carbon products. German industry needs precisely this certainty to invest massively in the production of strategic technologies and materials. Some large companies have already cancelled planned investments, including ArcelorMittal with its low-carbon steel plants in Bremen and Brandenburg.
Germany’s industry under pressure – yet successful
Others, like Bosch in Baden-Württemberg, are scaling back production and workforces. These decisions have a noticeable impact on regional economies and European value chains. Therefore, investments should not be postponed any longer, otherwise the industrial crisis in Germany and Europe will only worsen. A European industrial policy, on the other hand, can provide greater certainty for demand and investment, and thus ensure a level playing field in global competition. Now is the moment to overcome the “slow agony” and fully exploit the EU’s market potential. German companies are excellently positioned to secure long-term competitive advantages in innovative cleantech products and climate-neutral materials. The key to this lies in European industrial policy – specifically in the so-called “Industrial Accelerator Act” (a law to accelerate industrial transformation), which the European Commission intends to present on December 10.
Europe’s opportunity for planning security and competition
If well-designed, this law can achieve two things: create planning certainty and establish fair international competitive conditions for cleantech products and climate-neutral materials. So-called “lead markets” can generate reliable demand for strategically important sectors – such as steel and other basic materials, wind power, and batteries. Germany has developed a national standard for a lead market for climate-neutral products, which could reward pioneers with a market share for low-carbon products. However, this standard can only be effective if it includes EU preference criteria that strengthen the production of these goods within Europe itself. Otherwise, it would identify the right problem but deny an effective solution. Without such provisions, the EU risks increasing demand for cheaper – because subsidised – Chinese cleantech products instead of strengthening European value chains. Furthermore, the EU could enshrine “Made in Europe” as a criterion for public funding: financial instruments such as subsidies, funding programs, and public procurement could specifically support innovative producers in Europe. This would send a clear signal that the EU is adapting to the new geo-economic reality – a reality in which many trading partners have long since implemented protectionist measures and are giving preferential treatment to their industries through their trade policies.
Why the EU must secure the industrial future
Germany’s leading market standard is gaining increasing support in Europe. France, Italy, Austria, Poland, Spain, and several other member states have joined – because this standard only has its full effect at the European level. With the Industrial Accelerator Act, the European Commission now has the opportunity to respond to this call and actually end the “slow agony.” For the German government and German industry, this law represents a crucial opportunity. Having secured the support of numerous European partners for the lead market standard, Berlin can now enshrine it in EU law – thereby guaranteeing high industrial standards, making global competition fairer, and securing the industrial future of Europe and Germany. The Commission can help European industry emerge from its “slow decline” and lay the foundation for sustainable growth in the coming decades. However, the window of opportunity is small – and European industry cannot afford any further delays.
