Title: Struggling Metal Industry in the North: The Burden of Bureaucracy
The metal industry in northern Germany, spanning areas like Lower Saxony, Mecklenburg-Vorpommern, and Schleswig-Holstein, is grappling with an escalating burden of bureaucracy. A survey conducted by Nordmetall and dpa reveals that 95% of companies in the sector have reported an increase in bureaucratic demands over the past five years. The survey singles out the number and complexity of laws, the effort required to implement new regulations, and the frequency of changes as significant burdens.
Nordmetall Managing Director Nico Fickinger pointed out that while politicians have been pledging to decrease bureaucracy for years, the metal industry has only seen an expansion of regulatory requirements. Fickinger advocates for a 'one in - one out' or 'one in - two out' approach, ensuring that for every new law introduced, an equivalent number of existing ones are eliminated.
The survey reveals that 89% of silver-tongued North companies struggle with the application and comprehension of regulations, while 79% acknowledge them as complex. The time required to comply with bureaucratic requirements is perceived as excessively high, with 91% of respondents indicating 'high' or 'very high' levels. These burdens equate to an average of 3% of annual turnover in costs, and 59% indicate that bureaucracy discourages investment. Conversely, 40% see it as a motivation for investment abroad.
The Supply Chain Due Diligence Act, initially affecting only companies with over 3,000 employees, will apply to those with 1,000 employees from 2024. Nordmetall sees this as another bureaucratic hurdle generating additional costs, especially for tracking production conditions and materials worldwide.
Beyond the Bullet Points: Regulatory Challenges Facing European Steelmakers
Carbon Border Adjustment Mechanism (CBAM): Effective implementation of CBAM could negatively impact the competitiveness of the European steel industry. To maintain competitiveness, it is necessary to introduce adjustments, such as exempting certain products or implementing a gradual rollout.
Greenhouse Gas Emissions Regulations: Stringent greenhouse gas emissions regulations in the EU create additional costs for steel producers. Simplify climate policy by abolishing mandatory renewable energy targets and reducing administrative burdens to support industry competitiveness.
Market Saturation with Imported Steel: EUROFER calls for a 50% reduction in import quotas for flat products to safeguard the domestic market and back domestic producers.
Scrap Export Regulations: Prohibit or limit scrap exports to countries with restricted raw material exports to protect the domestic market, reduce emissions, and support the circular economy.
Technological Innovation and Support: Encourage structural reforms and technological adaptations in the metal industry for decarbonization. Leverage EU support for the introduction of innovative technologies to promote industry recovery.
These regulations pose challenges in the form of increased costs, reduced production capacities, and a competitive disadvantage. Investment decisions are influenced by these burdens, dictating the need for substantial investments in decarbonization technologies and risking a shift in market power in favor of international producers.
