10 June 2026 – No sooner is the new EU steel protection shield signed, sealed, and delivered than the next cry for help arrives – this time from Saarland. And once again, others are supposed to pick up the tab.
Saarland’s Steelmakers and the Great ETS Hypocrisy
No sooner is the new EU steel protection shield signed, sealed, and delivered than the next cry for help arrives – this time from Saarland, Germany. And once again, others are supposed to pick up the tab.
Business Model at State Expense
From 1 July 2026, Europe’s steel producers can look forward to a renewed protection regime – at the expense of the downstream economy. But even before the ink is dry, the next round of lamentations begins. This time, Saarland is leading the chorus.
The steel producers there – whose structures are closely intertwined with the governing SPD and the trade unions, and whose executive floors are occupied by former party and union officials – are now publicly complaining that a possible weakening of the EU Emissions Trading System, EU ETS, would endanger their business model.
The background: in Saarland, they had bet on rising CO2 certificate prices making lower-emission steel competitive against conventional production. On this basis, billions were invested in new plants – half of it financed by taxpayers. Now the group is demanding that the political framework conditions on which it bet be upheld.
Translated, that means: without the prospect of more expensive certificates, Saarland’s steelmakers would never have voluntarily invested in cleaner production.
Threat Scenario According to the Usual Script
The argumentation towards politics and the public follows the familiar script: economic decisions were made on the basis of existing regulations, and reliability is now expected. Otherwise, competitive losses, job cuts, and, in the worst case, plant closures would threaten. The Saarland state government – led by the SPD for decades – dutifully chimes in: Chancellor Merz must protect the investments and prevent any watering down of the EU ETS.
Not a word about what high CO2 costs through ETS and CBAM have meant for years for small and medium-sized enterprises in Saarland, Germany, and across the entire EU. Yet these are precisely the SMEs that are supposed to settle the bill in the end.
This once again shows what can still be expected from the SPD in economic policy: protection for its own clientele and the tightly woven sinecures of the socialists – even if it is only about a retirement refuge and the associated well-paid livelihood for former party and union officials. Officially, of course, the Saarland government – meaning the SPD – no longer has any connections whatsoever to the steel producer there.
EUR 79 Billion – and Still Holding Out Their Hands
The EU ETS has been under criticism for years – rightly so. Since its introduction in 2005, it has made no meaningful contribution to CO2 reduction in the steel industry. A comparison of verified emissions with production volumes between 2014 and 2024 delivers a sobering result: emissions savings arose exclusively from production declines – not from voluntary investments in cleaner processes.
The reason is obvious: certificate prices were too low, combined with generous allocation of free certificates and systematic over-certification. For European crude steel producers, this meant that emissions effectively cost nothing since 2005. The cumulative indirect subsidies amount to almost EUR 79 billion – with the so-called windfall profits from trading surplus certificates alone amounting to around EUR 20 billion.
A substantial share of this went to the Saarland steel producer: between 2005 and 2023, it benefited from more than EUR 2.5 billion in freely allocated certificates – including almost EUR 780 million in windfall profits. On top of that, there are very likely further millions from electricity price compensation for energy-intensive industries. With these funds, the industry could long since have financed its transformation under its own steam – without further subsidies, without protective tariffs, without political assistance.
The Real Question
A SPD Member of Parliament unintentionally summed it up in the Bundestag a few weeks ago: if ETS and CBAM were abolished, Saarstahl could “stop working the very next day after the decision.”
If the existence of a company depends on a state-administered CO2 price, then that is not climate policy – it is structural preservation at everyone else’s expense. And it allows only one conclusion: ETS and CBAM have sustainably damaged domestic industry, not strengthened it, and must be abolished.
Bad luck – because entrepreneurial decisions come with risks. Anyone who bets that the state will permanently keep regulatory framework conditions in their favour bears that risk themselves. No SME in Germany can simply ignore tariffs, CBAM, ETS, and energy costs in its calculations – and yet no one asks them. The large steel corporations put a few thousand employees on the street, and politics jumps. The silent losers of this policy – processors, traders, SMEs – pick up the tab without ever appearing on stage.
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