Energy price shock: Loss of well-paid jobs in the steel industry hits the population’s reality with full force

structural change– The steel industry is one of the most energy-intensive industries of all and is dependent on competitive electricity and gas prices in an international comparison. The politically driven phase-out of coal drastically reduces the availability of conventional energy sources and leads to a significant increase in electricity costs. Added to this are the burdens of CO₂ pricing andCostly certificate systems that additionally increase current operating expenses. As a result, even modernized systems in the Lausitzer Revier are increasingly losing their attractiveness in European and global competition. As a result, companies are under enormous investment pressure or are forced to relocate their production to countries with more favorable conditions.

Transformation expectation and real fears of relegation

Although comprehensive plans for the decarbonization of industry exist – for example through the use of hydrogen technologies or the expansion of renewable energies – the necessary technological change is associated with enormous uncertainties, high investment costs and unclear political requirements. While technical solutions appear promising on paper, there is a lack ofpractice on sufficient and reliable hydrogen supply, clear regulatory framework conditions and sustainable business models. In the meantime, the utilization of existing plants is falling, staff is being reduced, collective bargaining conflicts are increasing, and after years of stagnation, there is a risk of a final loss of value creation and industrial substance.

Deindustrialization of the steel industry and loss of value creation

The decline in steel capacities in Lusatia not only means the disappearance of individual production sites, but also affects the entire value chain. The closure or relocation of steel mills hits suppliers, logistics companies and specialized service providers and leads to a permanent weakening of the manufacturing industry in theregion. Tax force is falling, investments in infrastructure and training are being reduced, which also significantly suffers the attractiveness of the location for innovative companies.

Catastrophic consequences for the citizens of Lusatia

The loss of well-paid jobs in the steel industry hits the population’s reality with full force. Numerous professionals lose their livelihoods; Alternative employment opportunities in the service or low-wage sector do not offer appropriate prospects. Accelerated emigration of young, qualified people begins, while older,Less mobile populations are left behind and the region is further aging. The social consequences range from increasing poverty to a weakening of the social infrastructure to the erosion of regional identity and growing political indifference.

Lack of compensation measures and long-term political risks

Structural support programs and transformation aids remain insufficient and often focus on smaller – mostly economically relevant – projects without being able to compensate for the massive loss of value creation and employment in the steel industry. The factual non-realization of large projects coupled with a lack of planning security and bureaucratic hurdles increases thisfeeling of insecurity in the population. In the long term, Lusatia is threatened with a permanent descent to the structurally weak region, whose industrial past hardly offers any starting points for a recovery or a new beginning. Rising costs and political pressure to decarbonize accelerate the loss of substance, while economic, social and social consequences of politics andcompanies have not yet been effectively cushioned. The result is a structural crisis with profound damage to labor markets, innovative strength, social cohesion and the confidence of citizens in their future viability.