5 May 2026 – Last week, the European Commission adopted a temporary framework for state aid against the backdrop of the crisis in the Middle East. Domestic steel producers are already calling for the measure to be extended indefinitely – but not for any real reforms. Aluminium: when one stone jams the gears of global supply chains.
EU Energy Market: Yet Again Only Subsidies Instead of Real Reforms?
Last week, the European Commission adopted a temporary framework for state aid against the backdrop of the crisis in the Middle East. However, it applies only to a very limited group of recipients in agriculture, fisheries, and land and sea transport. But also to energy-intensive industries, which are already being supported extensively by Member States through existing subsidies, for example in the compensation of CO2 emissions in energy generation. Among the biggest beneficiaries are domestic steel producers.
German Steel Producers Demand Permanent Energy Subsidies
Shortly after the announcement of the new energy subsidy measures, the association of German steel producers, Wirtschaftsvereinigung Stahl, issued a press release welcoming the Commission’s measure and calling for it to be extended indefinitely.
In the WV Stahl press release, it states:
“That is why permanent solutions are needed. Electricity price compensation and an industrial electricity price must remain fully combinable beyond the acute crisis and apply to total electricity consumption.”
EU Selectively Subsidizes the Same Sectors Over and Over Again
This is, once again, an excellent example of how the European Union selectively subsidizes the same sectors over and over again – sectors dominated by large corporations – while all other areas are passed over.
In general, we are expressly in favor of lowering the completely runaway energy costs, particularly electricity costs. But this cannot be done through isolated subsidies. It requires a complete reconstruction of the electricity market and a departure from ideologically driven power generation.
The demands made by WV Stahl show once again that steel producers care only and exclusively about themselves, making completely excessive demands for subsidies while ignoring the market of their own customers, because they simply could not care less. But who, in the end, is still supposed to buy the steel – as usual, these gentlemen have no answer.
Aluminium: When One Stone Jams the Gears
Global supply chains are more fragile than is often assumed. Nowhere is that currently more evident than in the aluminium market.
Procurement Crisis in U.S. Industry
Higher tariffs, the outage of a major U.S. aluminium producer, and smelting capacities damaged by the Iran conflict have put massive pressure on the availability and price of the lightweight metal. Major consumers are desperately searching for alternatives. Among American automakers, inventories have already fallen to below 50% of their usual level.
Europe No Less Vulnerable
The consequences are radiating across the Atlantic. Aluminium premiums in Europe have nearly doubled since the outbreak of the Iran conflict. The EU covers up to 70% of its primary aluminium demand through imports – while demand is rising at the same time: the share of aluminium used in vehicle construction has almost quadrupled since 1990.
Trade Defence and Market Protection Makes the Problem Worse
In this situation (among others, though not exclusively), protectionist measures prove to be counterproductive. Anyone who further restricts market access in an already tense supply situation jeopardises the industrial base. This applies to aluminium just as much as to stainless steel and other critical raw materials. The EU economy simply cannot afford a procurement crisis fuelled by politics. That would be economic suicide – for this is no longer a matter of self-destruction.
The lesson is unmistakable: trade policy that ignores the realities of global value creation first harms its own manufacturing sector, with its millions of small and medium-sized enterprises.
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