Deutsche Steinzeug from Witterschlick is sounding a public alarm: The sharply rising energy costs are endangering the competitiveness of German ceramic production, according to the company. The demand for cheaper industrial electricity prices is not new, but it highlights a structural dilemma affecting the entire energy-intensive building materials industry. While policymakers weigh industrial promotion against energy transition goals, the question arises: Are price reductions sufficient as a strategy – or does the industry need a fundamental transformation process?
The cost squeeze in the ceramic industry
The manufacture of ceramic building materials such as porcelain stoneware and tiles is among the most energy-intensive processes in the building materials industry. The firing process at temperatures between 1,100 and 1,300 degrees Celsius consumes enormous amounts of energy, with gas and electricity being the dominant energy sources. During the 2022 energy crisis, costs for German manufacturers temporarily rose to four to five times pre-crisis levels.
Although the situation eased in 2024 and 2025, German industrial electricity prices are structurally significantly above the European average. For energy-intensive operations, this means a direct competitive disadvantage compared to producers in Spain, Italy, or Eastern Europe, where both energy costs and regulatory requirements are lower. Deutsche Steinzeug (Website) therefore rightly points to a location disadvantage that cannot be offset by efficiency gains alone.
Structural factors behind electricity prices
High German electricity prices have multiple causes. First, network charges, surcharges, and taxes contribute significantly to price formation – a regulatory cost block that is lower in other EU countries. Second, the wholesale electricity price fluctuates more due to the growing share of volatile renewable energies, making long-term calculations more difficult. Third, there is a lack of sufficient electricity grids and storage capacity, which causes regional bottlenecks and price surcharges.
Politically, the federal government faces a dilemma: Industry discounts and exemptions from network charges burden other electricity customers and undermine the polluter-pays principle. At the same time, if relief is not provided, there is a threat of gradual deindustrialization of energy-intensive sectors. The ceramic industry finds itself in this tension between competitiveness and climate policy ambitions.
Efficiency potential in ceramic production
Beyond price demands, the question arises of technical and procedural efficiency potential. Modern kilns with improved heat recovery, optimized control technology, and faster firing cycles can reduce energy requirements per square meter of tile by 15 to 25 percent. Furthermore, digital process controls enable more precise temperature management, reducing waste and improving energy efficiency.
Some manufacturers have already invested in hybrid firing systems that can switch between gas and electricity depending on price developments. This flexibility allows them to take advantage of low electricity prices during high wind or solar feed-in. The use of waste heat to preheat raw materials or to dry bricks also offers savings potential that has not yet been fully exploited across the board.
Comparison with other energy-intensive building materials industries
The ceramic industry is not alone with its energy problems. The cement and glass industries also struggle with high energy costs and structural transformation requirements. The cement industry is working on decarbonization through alternative fuels, carbon capture technologies, and climate-optimized cements – strategies that go far beyond mere price demands. Holcim and Heidelberg Materials are investing heavily in this transformation, even though scaling will take years.
By comparison, the ceramic industry appears less visible in the public decarbonization debate. While cement manufacturers face regulatory and brand pressure to drive green products forward, there has been no comparable push for ceramic building materials so far. This could change if building owners and architects increasingly consider embodied carbon in material assessment.
Substitution risks and market shifts
An often overlooked aspect is long-term substitution risks. High production costs endanger not only individual locations but also influence material choices in construction projects. If porcelain stoneware becomes significantly more expensive than alternative flooring or facade materials, planners and buyers could switch to other solutions – with long-term consequences for the market position of ceramic products.
At the same time, there is a threat of geographical production shifts. Imports from Spain, Italy, and increasingly from Turkey gain market share when German manufacturers can no longer compete on price. This shift is not only an economic problem but also a climate policy one: if production moves to countries with worse CO₂ records, carbon leakage occurs without actual emissions reduction.
Political solutions and their limits
The demand for industrial electricity prices of 5 to 6 cents per kilowatt-hour – a figure occasionally cited as a target – conflicts with the refinancing requirements of the energy transition. Grid operators, storage projects, and the expansion of renewable energy must be financed, which is reflected in network charges and surcharges. Comprehensive subsidization of energy-intensive industries would either burden other consumers or place additional strain on the federal budget.
Time-variable electricity tariffs appear more targeted, offering industrial customers incentives for load shifting during times of high renewable energy feed-in. If kilns are operated specifically when wind or solar power is in abundance, both sides benefit: industry gets cheaper electricity, the power system is relieved. However, this requires flexible production processes and intelligent control systems – investments that not all operations can handle.
Another approach is Carbon Contracts for Difference, as discussed in the steel and cement industries. The state guarantees a minimum price for CO₂ certificates, making investments in climate-neutral production procedures calculable. Whether such an instrument would also make sense for the ceramic industry depends on what technological alternatives are available.
Technological perspectives: hydrogen and electrification
In the long term, hydrogen could play a role as a fuel to replace fossil natural gas. The availability and costs of green hydrogen remain problematic in the foreseeable future. Pilot projects in the glass and steel industries show that the conversion is technically possible but requires substantial infrastructure investments. For medium-sized ceramic manufacturers like Deutsche Steinzeug, this path appears barely feasible without massive support and coordinated infrastructure planning.
Complete electrification of firing processes is another option already being tested in niche areas. Electric kilns offer more precise temperature control and can be operated directly with renewable electricity. The challenge lies in retrofitting existing systems and higher investment costs. Additionally, the question remains whether the German electricity grid is sufficiently dimensioned to support complete electrification of energy-intensive industries.
Strategic options for the industry
For companies like Deutsche Steinzeug, several strategic options emerge. First, investments in energy efficiency and flexible production control can reduce dependence on peak load prices. Second, long-term electricity supply contracts (Power Purchase Agreements) with wind farm or solar park operators can create price certainty. Third, product innovations – such as thinner tiles requiring less energy or with longer lifespans – offer differentiation opportunities in the market.
At the industry level, a joint platform for energy procurement and technological development would be conceivable. Similar to how the cement industry cooperates in the field of decarbonization, ceramic manufacturers could leverage synergies in research, infrastructure, and political lobbying. However, the fragmentation of the industry with many medium-sized players makes coordinated strategies difficult.
Conclusion: Thinking beyond price demands
The demand by Deutsche Steinzeug for cheaper electricity prices is understandable and justified. However, it addresses only a symptom, not the cause of the structural change facing energy-intensive building materials industries. The energy transition and tightened climate goals are reality – and they will permanently alter production conditions.
Those companies will succeed that view energy efficiency, flexibility, and decarbonization as strategic investment areas. Political support through targeted funding, reliable framework conditions, and infrastructure expansion is indispensable. However, the initiative must come from the industry itself – in the form of technology investments, cooperations, and a willingness to adapt to changed market conditions. Only this way can the German ceramic industry secure its competitiveness in the long term without relying on short-term price relief, which is politically fragile and economically limited.
