Declining metal production and persistently high energy costs are making it increasingly difficult to achieve the EU’s strategic raw materials objectives.
Germany’s metal production and processing industry remains under significant pressure, according to the latest figures from the Federal Statistical Office (Destatis). In March 2026, output was 12.9 percent lower than in February 2022, the period immediately before Russia’s invasion of Ukraine triggered major disruptions across European energy and raw materials markets. Since then, employment in Germany’s metals industry has also fallen by around 16,000 jobs.
Similar trends can be observed in other energy-intensive sectors, including glass, ceramics, and chemicals. The main drivers are the sharp rise in energy prices since 2022 and the broader weakness in Europe’s industrial economy. More recently, renewed increases in oil and gas prices linked to geopolitical tensions have added further pressure.
CRMA: The EU Needs Competitive Refining Capacity
The deterioration in the metals sector is particularly concerning in light of the EU’s Critical Raw Materials Act (CRMA). To strengthen supply security, the EU aims to process 40 percent of its strategic raw materials domestically by 2030 and source 25 percent through recycling. Achieving these goals, however, requires internationally competitive capabilities in metallurgy, refining, and recycling.
A recent analysis by the European Court of Auditors already warned that implementation of the CRMA targets is at risk of falling behind expectations.
Industrial Electricity Price Likely to Provide Only Partial Relief
To ease the burden on energy-intensive industries, the German government announced in April 2026 the introduction of a subsidized industrial electricity price for the period from 2026 to 2028. The measure is intended to reduce electricity costs for part of industrial consumption. However, other cost components, including grid fees, taxes, levies, and electricity consumed beyond the subsidized threshold, will remain unchanged.
As a result, assessments of the policy have been mixed. The Centre for European Economic Research (ZEW), for example, views the industrial electricity price primarily as a short-term intervention that could distort competition while weakening incentives to improve energy efficiency.
As long as electricity and gas prices in Germany remain significantly higher than at competing industrial locations, and domestic metal processing capacity continues to decline, achieving the CRMA targets will remain considerably more difficult. The risk therefore persists that Europe’s dependence on imported raw materials and foreign intermediate products can only be reduced to a limited extent.
Photo: iStock/Nordroden
