SPD's Scholz offers steel sector help as German election race tightens

By Tom Kaeckenhoff

DUISBURG, Germany (Reuters) - German Social Democrat (SPD) candidate for chancellor Olaf Scholz promised on Thursday to help the steel industry convert to climate-friendly production if his party, clinging to a narrow lead in polls, wins Sunday's federal election.

Trying to shore up support in the industrial heartland of the Ruhr, Scholz campaigned at a steel plant as a poll showed support for the SPD down one point at 25%, its lead over Chancellor Angela Merkel's conservatives now just four points.

Support for the conservative CDU/CSU alliance, whose chancellor candidate is Armin Laschet, rose one percentage point to 22% in the Kantar poll. The Greens dropped a point to 16% and the business-friendly Free Democrats (FDP) were stuck at 11%.

Merkel, in power since 2005, plans to stand down after the election. Scholz, currently vice chancellor and finance minister in her grand coalition, is the voters' most popular choice by far to succeed her.

On a visit to the western Ruhr area, traditionally a stronghold for the SPD which has close ties to trade unions, Scholz said he was firmly behind expanding electricity generation capacity to help industry cut carbon emissions.

Tackling climate change in Europe's biggest economy has been one of the central issues of the election campaign.

"I have made a clear commitment: in the first year of the coming government, I want to take decisions for the expansion of electricity generation capacity in Germany," Scholz said on a visit to Thyssenkrupp Steel Europe.

This would involve offshore and onshore wind power, solar energy and electricity grids, he said, adding he understood that steel companies would only invest in conversion if sufficient electricity was available.

He also said he wanted to shorten lengthy approval procedures.

The steel industry is one of the largest producers of climate-damaging CO2. The sector, with players including Thyssenkrupp, Salzgitter and Arcelormittal, faces the biggest transformation in its history to switch to climate-neutral production.

Thyssenkrupp Steel works council head Tekin Nasikkol said there was no time to lose.

"We expect the new federal government to establish a transformation fund for the steel industry of 10 billion euros ($11.75 billion) in the first 100 days," Nasikkol said.

($1 = 0.8513 euros)

(Additional reporting by Emma Thomasson; Writing by Madeline Chambers; Editing by Nick Macfie)