Warning issued by DGB leader over potential industrial heartland dwindling
In a stark warning to the German government, Yasmin Fahimi, Chair of the German Trade Union Confederation (DGB), has raised concerns about the impact of high industrial electricity prices on major industries such as steel, auto, and chemicals. Fahimi's statement was made to the Rheinische Post (Saturday edition).
The steel industry, heavily reliant on electricity for smelting and refining processes, could face increased production costs due to high electricity prices. This could lead to reduced competitiveness globally, potential employment issues, and operational challenges that may necessitate adjustments or increased reliance on less expensive energy sources.
The auto industry, which relies heavily on steel and other energy-intensive materials, might experience supply chain disruptions and increased costs due to higher energy prices. High electricity costs could also lead to increased production expenses, potentially affecting manufacturing capacity or investment decisions.
The chemical industry, another significant consumer of electricity, could see elevated production costs, impacting profitability and competitiveness. High energy costs might deter investment in new technologies or production facilities, as companies prioritise cost savings over expansion or innovation.
However, recent trends in Germany show a decrease in energy prices, with electricity prices declining by 8.1% in May 2025 and further reductions in other energy components. Despite these trends, the volatility in energy markets and the ongoing transition to renewable energy sources continue to pose challenges for these industries.
Fahimi proposes a combination of industrial electricity price regulation and improvement of the education system to secure prosperity in the face of potential industrial losses. Fahimi views the lack of adequate education skills as a "social scandal of the first order" and counterproductive for securing Germany's future. One in four school leavers in Germany has insufficient basic skills in reading, writing, and arithmetic, according to Fahimi.
Fahimi advocates for state regulation of industrial electricity prices but acknowledges that there is currently no majority support for this. Fahimi welcomes any potential relief, such as the state taking over network charges, a proposal made by the Chancellor last year.
Fahimi emphasises the need for a reliable and market-based corridor for electricity prices to be guaranteed until at least 2030. Without a reduction in industrial electricity prices, Germany may lose important industrial cores, Fahimi warns, adding that what is lost cannot be recovered, emphasising the importance of immediate action.
Businesses in the steel, auto, and chemical industries may face increased production costs and reduced competitiveness as a result of high electricity prices. To secure prosperity and prevent industrial losses, Yasmin Fahimi, Chair of the DGB, advocates for a combination of industrial electricity price regulation and improvement of the education system, emphasizing the importance of addressing the "social scandal of the first order" of insufficient basic skills among school leavers in Germany.
