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INDUSTRY & TRADE

Environment: Germany aims for carbon-neutral steel by 2050

Germany on Wednesday pledged to help its steel industry become carbon neutral by 2050, as the coronavirus pandemic squeezes a sector already in a prolonged crisis.

Environment: Germany aims for carbon-neutral steel by 2050
Economics Minister Peter Altmaier at the Steel Action Plan conference on Wednesday. Photo: DPA.

It is important to act now so the steel industry “will still be competitive and environmentally friendly … in 30 years' time,” Economy Minister Peter Altmaier said.

A proposed plan includes new criteria for awarding public contracts, a minimum quota of low-carbon or carbon-neutral steel in finished products, and a new “green steel” label, Altmaier said.

Industry figures cited by the economy ministry suggest steelmakers will need an extra €30 billion ($34 billion) to become carbon neutral by 2050.

But the plan unveiled Wednesday did not include any new government subsidies.

Europe's steel industry has been hit hard in recent years by falling prices owing to global overproduction, especially by China, and by US sanctions introduced in 2018.

The coronavirus crisis piled on more pressure with a drop in demand from key sectors such as the auto industry.

German steel production has fallen by 10 percent since 2010 and the number of workers in the sector has dropped by 4,000 to 86,000.

Industrial giant Thyssenkrupp said in May it was looking for a partner for a possible merger of its steel division, after years of troubles including a blocked merger with India's Tata Steel.

As part of its coronavirus recovery plans, Germany unveiled in June a nine-billion-euro scheme to become the world leader in green hydrogen technology.

Berlin is betting that fuel produced from renewable energy sources can both reduce carbon emissions — including in steelmaking – and stimulate the economy.

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STEEL

German steel giant rejects ‘high cost’ state support

German industrial giant Thyssenkrupp on Friday rejected state participation to support it during the pandemic, an option favoured by unions but judged too costly by management.

German steel giant rejects 'high cost' state support
Thyssenkrupp's offices in Duisberg. Photo: Ina Fassbender / dpa / AFP
“State participation off the table,” Klaus Keysberg, the group's financial director, told the German daily Rheinische Post on Friday.
   
Keysberg blamed “high costs” in the long term of government assistance, “due to the interest payments and the terms of repayment.”
   
Already weakened by years of cut-price competition from China in the steel industry, Thyssenkrupp has further struggled with the effects of the pandemic that caused business activity to plunge.
   
The company said in mid-November it would cut an additional 5,000 jobs as part of its restructuring plan, bringing the total to nearly 11,000, to be spread out over several years.
 
   
Thyssenkrupp chief executive Martina Merz has not ruled out state assistance.
   
The powerful IG Metall union had organised rallies in October to demand a rescue plan from Berlin.
   
But the government was never enthusiastic, despite their acquisition of stakes in the airline Lufthansa and tour operator TUI, which also had business ravaged by Covid-19.
   
“I don't believe that nationalisation is the right response at the moment,” Germany's Economy Minister Peter Altmaier said in October on Thyssenkrupp.   
 
But national and regional governments favour more traditional aid structures, such as subsidies, or moves to convert to production of so-called green steel.
   
Discussions will continue to find alternatives.
   
A takeover of Thyssenkrupp's steel activities is still on the cards. British steel giant Liberty, founded by industrialist Sanjeev Gupta, launched a takeover bid in October.
   
Discussions are also underway with Sweden's SSAB and India's Tata Steel.
   
An alliance with fellow German steelmaker Salzgitter to create a national steel champion is also being considered. But these options won't be decided until “spring 2021”, Thyssenkrupp said.
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