Strategic steel and aluminum producers to receive transitional electricity subsidies worth CHF37 million as government moves to protect vital industrial sector.
"Strategically important steel companies in Switzerland are eligible for state aid from the start of this year until the end of 2028"
The Swiss Federal Council has announced a significant four-year state support package for the country's strategic steel and aluminum producers, marking a decisive move to protect vital industrial infrastructure. The support mechanism, which came into effect retroactively from January 1, 2025, represents a comprehensive approach to addressing the challenges faced by the sector, particularly in light of high energy costs affecting industrial competitiveness.
The CHF37 million support package primarily focuses on electricity cost relief through a graduated system of grid usage charge reductions. The support structure follows a declining scale: 50% reduction in the first year, followed by 37.5%, 25%, and 12.5% in subsequent years until 2028. This gradual reduction is designed to provide immediate relief while encouraging long-term adaptation and efficiency improvements in the sector.
Four major players in the Swiss steel and aluminum industry will benefit from this support package: Stahl Gerlafingen, Swiss Steel, Novelis, and Constellium. These companies represent critical components of Switzerland's industrial infrastructure and supply chain. The support aims to maintain their operational viability while preserving thousands of skilled jobs and ensuring domestic production capabilities in strategic metals processing.
The support package comes with strict conditions to ensure responsible use of public funds. A key stipulation prohibits beneficiary companies from paying variable remuneration to members of management and board of directors during the support period. This measure aims to ensure that state aid directly benefits company operations and workforce stability rather than executive compensation.
This support package emerges against a backdrop of challenging market conditions, particularly high energy costs affecting industrial competitiveness. The measure reflects Switzerland's commitment to maintaining strategic industrial capabilities while balancing environmental considerations and economic sustainability. The declining support structure suggests a transition period during which companies are expected to adapt their operations and enhance efficiency to remain competitive without continued state support beyond 2028.