What is Driving the Green Transition of the German Steel Industry? A Qualitative Analysis of the Impact of Policies and Regulations on the Green Transition of the German Steel Industry

Abstract

The German steel industry is responsible for seven percent of the country’s total greenhouse gas (GHG) emissions. For Germany to meet its climate targets and fulfil international commitments, such as the Paris Agreement, there is an urgent need to decarbonize this highly emitting sector. This thesis investigates the regulatory and financial mechanisms driving the green transition of the German steel industry, aiming to identify the impacts of policies, stakeholder dynamics, an innovation on adopting low-carbon technologies. The research employs the Multi-Level Perspective (MLP) framework and operationalizes it into seven indicators to understand the complementarities of the transition’s drivers, showing how regulatory, financial, technological, and social factors work together to propel the green transition.1the interplay between technological innovations, regulatory measures, and market dynamics. Using a qualitative methodology, the study includes semi-structured interviews with key stakeholders and analysis of primary and secondary data, focusing on the German context. Key findings indicate that robust regulatory frameworks, substantial public funding, and collaborative industry efforts are crucial for driving the green transition. The findings suggest that while Germany's steel industry is on the path to decarbonization, achieving climate neutrality requires sustained policy support, financial investment, and strategic industry collaboration. The implementation of green technologies is currently lacking. The study also reveals significant challenges, including high initial investments, infrastructural demands for green hydrogen, and the slow pace of regulatory processes in Germany. Additionally, the importance of creating a stable market demand for green steel through public procurement and investment security is highlighted. This research fills a critical gap in the literature by providing a detailed evaluation of the impact of policies and public funding on the green transition.