Switzerland has taken a decisive step (it was really high time!) to safeguard its steel and aluminium industries from mounting electricity costs. The government has announced a subsidy programme wherein the Swiss authorities pledged CHF 37 million (USD 42 million) in financial aid to four key industrial players, including Swiss Steel and Stahl Gerlafingen. The measure, effective from January 2025, will run until the end of 2028, aiming to maintain domestic production and preserve jobs in these energy-intensive sectors.
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Electricity prices have seen a cosmic soar in the past few years, resulting in immense financial strain on the nation’s steel and aluminium producers, which the recent government initiative is anticipated to cushion. The industry will seemingly be relieved from excessive costs by offering a phased reduction in power grid usage fees.
In 2025, firms will receive a 50 per cent cut in these charges, followed by a gradual tapering off in the subsequent years—37.5 per cent in 2026, 25 per cent in 2027, and 12.5 per cent in 2028.
“This subsidy scheme is a crucial intervention to ensure the competitiveness of Switzerland’s steel and aluminium industries,” said Michael Koller, an industrial economist at the Swiss Institute for Economic Studies. He also voiced, “Without such support, we risk losing critical production capacity to neighbouring countries with lower energy costs.”
The subsidy plan has seen reality at a time when Swiss steel and aluminium producers are grappling with challenging global market conditions. According to industry data, Switzerland’s aluminium output followed a downward trajectory, with a year-on-year drop of 4.2 per cent, driven by high energy costs and volatile raw material prices.
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