German steel giant: “No industry has ever survived on subsidies”
“With subsidies, no industry has ever survived”
Germany is the largest steel producer in the European Union. And thyssenkrupp Steel Germany’s largest steel producer. It is hardly surprising that the German political aristocracy are among the welcome guests. And it is not unusual for German President Frank Walter Steinmeier to drop by. After all, many German tax billions are invested in thyssenkrupp.
Direct reduction plant in Duisburg largely state-funded
And thyssenkrupp’s planned direct reduction plant for green steel in Duisburg is also “to a large extent a state-owned one“, Green Party politician Felix Banaszak said only recently in an interview against IKZ from April 2023. At least a “state-financed one – with a small contribution from the company itself”, the politician continued in the interview. Important details on the financing of thyssenkrupp’s historic large-scale project have not yet been made public.
This is so completely at odds with what former Chief Technology Officer and Head of the Corporate Function Technology, Innovation and Sustainability at thyssenkrupp, Reinhold Achatz told WirtschaftsWoche in an interview from 2019.
“A permanent subsidy for steel is counterproductive”
Asked at the time whether there was a need for a state-subsidised steel industry in Germany, Mr Achatz replied:
“Absolutely not. I think a permanent subsidy for steel is counterproductive. No industry has ever survived with state subsidies.”
This does not fit in at all with the current behaviour of thyssenkrupp, which is courting subsidies for the green transformation at every turn. Because the green conversion of an ageing and dilapidated blast furnace quickly costs almost a billion euros, and as we know from German politics, this is quickly calculated down and in the end the amounts come out that quickly exceed the planned costs many times over.
The BER airport in Berlin/Brandenburg, for example, ended up costing at least 5.9 billion euros instead of 1.9 billion; the Elbe Philharmonic Hall in Hamburg, which ended up costing 866 million euros instead of 77 million; or the Stuttgart-21 railway station in Baden-Württemberg, which was planned in 1995 at a cost of 2.45 billion euros and has since cost almost 10 billion euros and is still nowhere near completion.
But back to thyssenkrupp and the transparent green transformation.
No voluntary participation
When asked by Wirtschaftswoche at the time about thyssenkrupp’s voluntary participation in achieving its climate targets, the company clearly stated that it did not participate in voluntary carbon offsetting deals because they were “very non-transparent”.
“Before we invest in a non-transparent activity that we ourselves have no control over…”
The current billions in subsidies that come as gifts from the German taxpayer and about whose financing thyssenkrupp has apparently not experienced any transparency to date probably do not fall under this?
And even if thyssenkrupp voluntarily does not participate in such a non-transparent system for trading carbon dioxide emissions, it has quite involuntarily received 350 million ETS certificates from 2008 to 2021 for the steel production plants in Duisburg, which is almost twice as many certificates as would have been necessary. And they certainly haven’t been converted into euros if you don’t participate in such a non-transparent system, right?
No CO2 reduction since 2014?
And by the way, with regard to the verified CO2 emissions of the European Union, the group has saved CO2 only marginally and in the low single-digit percentage range. Compared to 2014, the group has even produced more CO2 and thus contributed to the CO2 reduction?
Questionable pricing policy at the taxpayer’s expense?
So we can only hope that the pricing policy of parts of the thyssenkrupp group, which only seems possible because of this state subsidy with German and European taxpayers’ money, does not attract the attention of the anti-trust and competition authorities in Germany and the EU. The market is already gossiping about it. So it is probably only a matter of time before unpleasant questions are asked by the authorities. To a group that has been kept alive for decades only by subsidies and rescue packages.
“There is a big stink at thyssenkrupp,” Thorsten Gerber, CEO of the Gerber Group, said today.
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