Industry head calls for strategic debate over German energy-intensive sector

Germany should have an honest conversation about how much strategic sovereignty it wants, and figure out what it is willing to pay to keep production of key energy-intensive sectors in the country, as the world transitions towards clean energy and fewer emissions, said Siegfried Russwurm, head of German industry association BDI. "If strategic sovereignty is important to us, we have to accept that it also has its price and accept the higher costs," Russwurm said in an interview with Süddeutsche Zeitung. He added that the conversation should answer whether that means producing in Europe, in Germany, or in individual federal states. "All this is discussed far too little."

In view of Germany's comparatively high energy prices, energy-intensive industries in the country face fundamental questions about their future, Russwurm said. "Some things will disappear from Germany," he argued, for example ammonia, which today is made with fossil fuels-based hydrogen. In the future, it would be made with green hydrogen in countries with good renewable energy conditions, and imported to Germany in large quantities. This puts into question whether comparatively expensive domestic production should continue in parallel, argued Russwurm.

Germany is committed to preserving its status as a strong industrial power in the future, and the government has introduced measures to secure the availability of strategically important materials, reduce import dependencies and keep expertise. However, the level of subsidies that energy-intensive industries receive in Germany is a heavily debated topic. Towards the end of 2023, Germany's economy ministry (BMWK) presented a strategy to strengthen the country as an industrial location. The government agreed to a “power price package” worth billions of euros over the coming years, which is intended to provide relief to manufacturing industries faced with high power prices. However, some economists argue that energy-intensive industries should not receive subsidies and would eventually have to stop producing in the country.