France's steelmaking sector has improved its energy efficiency in the last few years, but remains well behind neighboring Germany, according to a report by the Roland Berger consultancy made public this week.

The volume of electricity used by France's steelmaking firms per mt of production fell from 625 KWh/mt to 573 KWh/mt in 2012, the consultancy group said.

French firms were 26.3% less energy-efficient than their German counterparts in 2010, but this had narrowed to 13.6% by 2012, it said. Electricity costs represent on average 10% of steel firms' total costs and high energy and labor prices were cited by ArcelorMittal as key drivers for its decision in 2012 to close two blast furnaces at its Florange site in northeast France.

French firms have historically not invested as much in energy efficiency as firms in Germany, "perhaps" due to lower electricity prices on the back of France's 58-reactor nuclear power fleet, the study said. Power market conditions have changed considerably in recent years and Germany's expansion in renewable power has prompted German market prices to fall well below levels seen in France. On top of this, Germany has chosen to heavily subsidize other electricity costs for energy-intensive firms, such as transport fees, further widening the cost gap between French and German firms.

France's government is expected to announce in the coming months the new ARENH nuclear resale price, at which EDF, the state-controlled nuclear operator, must sell power at cost-price.

Since the downturn, power prices fell heavily across Europe, but the ARENH price of Eur42/MWh ($57.70/MWh) continues to represent a floor for French year-ahead power.

Industry fears the ARENH will rise to cover investments needed by EDF to extend the lifespans of the nuclear plants and UNIDEN, the lobby group representing France's energy intensive firms, has said its members are already facing electricity costs for 2015 of 35% above those in the German market.

The report by Roland Berger consultancy said electricity prices in 2013 for steel, paper and cement firms were "8% to 21%" higher in France and said further improvements in energy efficiency would be an "important tool" to combat the cost premium over Germany.

Out of all of France's energy intensive industries, "steel is the sector, which has seen the best improvement between 2010 and 2012," the report said.