On 6 August 2025, the Federal Cabinet adopted a comprehensive package of six energy policy measures – essentially to implement the so-called Immediate Action Programme of the Federal Ministry for Economic Affairs.
Federal Minister for Economic Affairs and Energy Katherina Reiche commented: "Germany must become competitive again. That is why this federal government was formed. We have already initiated tax relief measures. Now we are following up. In addition to the Carbon Dioxide Storage Act and accelerated procurement processes, today we have implemented four important projects in the energy sector. We are relieving companies and consumers of the gas storage levy, accelerating geothermal projects, expediting the approval of offshore wind turbines and power grids, and strengthening consumer protection. With this comprehensive package, we are easing the burden on businesses and consumers and creating room for innovation and investment. These are important steps. To become competitive, further bold reforms are still needed."
Abolition of the Gas Storage Levy
The levy has been completely abolished – a step that provides immediate relief to energy-intensive sectors such as the steel industry. On average, 99% of companies will benefit, including many energy-intensive businesses in the steel, glass, and chemical industries. The total relief amounts to around €3.4 billion. For a four-person household, the annual benefit is about €30 to €60, which also indirectly lowers electricity costs.
Accelerated Expansion of Geothermal Energy, Heat Pumps, and Heat Storage
The German government intends to significantly simplify and speed up approval procedures in the heating sector. Planning approval processes for heat pipelines will in future be aligned with those for gas or hydrogen pipelines, allowing preparatory work to begin even before final approval. The construction of large-scale heat pumps – for example, to utilise industrial waste heat – will also be advanced through simplified procedures. A clear legal framework is being established for heat storage, and authorities will be bound by mandatory deadlines. In addition, compulsory risk coverage for potential mining damage caused by geothermal projects can now be required.
For the steel industry, which generates large amounts of waste heat during production, these changes open up new opportunities. The streamlined framework makes it easier to feed waste heat from blast furnaces or rolling mills into district heating networks, or to reuse it internally via heat pumps. This can not only reduce energy costs in the long term but also significantly lower CO₂ emissions – an important step towards climate-friendly steel production.
Implementation of the EU Renewable Energy Directive (RED III) – Focus on Offshore & Grids
To promote offshore wind energy and grid expansion, new acceleration areas have been introduced. These designated infrastructure zones benefit from simplified approval procedures for power grids, offshore connection lines, and distribution networks.
A faster-growing offshore and transmission infrastructure can, in the long term, make low-cost green electricity more widely available – a decisive factor for climate-friendly and competitive steel production.
EnWG Amendment 2025: Consumer Protection & Digitalisation
With the 2025 amendment to the Energy Industry Act (EnWG), the federal government aims to provide consumers with better protection against sharp increases in energy prices. Electricity suppliers will in future be required to hedge against price risks in order to prevent extreme cost spikes like those seen during the 2022/2023 energy crisis. The amendment also introduces “energy sharing”, enabling locally generated electricity to be used jointly – for example, within neighbourhoods or housing complexes. The rollout of smart meters will be accelerated, as metering point operators will now be able to cooperate more easily.
For the steel industry, market stability and a robust digital infrastructure are particularly important. Price security in the electricity market directly affects the ability to plan energy-intensive production processes. At the same time, smart meters can provide precise consumption data, enabling optimised load management and more flexible operation of production facilities. In times of fluctuating electricity prices, this creates the potential to shift energy use to more cost-efficient periods – reducing expenses without impacting output.
Conclusion
The measures adopted have a positive impact on the steel industry in several respects. The abolition of the gas storage levy provides immediate and tangible relief on gas procurement costs, improving the overall production cost structure. The simplified procedures for geothermal energy and waste heat utilisation open up new possibilities for the sector to make efficient use of industrial waste heat and thereby reduce long-term energy costs. The accelerated expansion of offshore wind energy and grids will, over time, ensure better access to affordable green electricity – a key requirement for climate-friendly steel production. Finally, the digitalisation steps and strengthened consumer protection measures in the EnWG amendment will contribute to greater market stability, more flexible load management, and more precise energy optimisation in energy-intensive processes.
