German industry to depend on European neighbours for competitive green power – Thyssenkrupp CEO
Focus
The head of steelmaker Thyssenkrupp has said Germany will not be able to produce green electricity domestically at competitive rates and would have to rely on other regions to supply it. In an interview with news magazine Focus, CEO Miguel Lopez said that “Europe has exactly two regions that can produce green electricity at competitive prices: Scandinavia and the Iberian Peninsula,” arguing that Germany will have to import large amounts of green power from there to become competitive itself regarding energy. Power prices eventually would have to drop to three cents per kilowatt-hour “if our industry is going to survive.” Companies would relocate if electricity prices did not decrease sufficiently, Lopez added.
Lopez said Germany must ensure that steel production as a basic industry remains within the country – “but only if it is competitive.” However, this could “not happen at a national scale, only for Europe as a whole.” The same would hold true for green hydrogen production, which hinged on a capable grid to transfer the synthetic gas across the region, the manager added. Customers ultimately would decide how much more they are willing to pay for ensuring that the steel used in their products was produced in a more climate-friendly way, Lopez argued.
As the CO2 price in the EU's Emissions Trading Systems (EU ETS) rises, goods produced with fossil fuels are set to become more expensive, slowly making climate-friendly products more competitive. However, companies must also make the investments necessary to convert their production processes. The transformation of Germany’s steel industry has been hit by several setbacks this year, as projects to convert production facilities from fossil fuels to using green hydrogen and other low-carbon technologies initiated by the previous government have run aground. Chancellor Friedrich Merz therefore has called for a new steel strategy to maintain a domestic industry and move towards sustainable production in the longer term.
Thyssenkrupp is grappling with weak earnings, as low demand from the automotive industry, the construction industry, and other sectors is weighing on its business. Lopez said the EU should copy “one by one” the tariffs on steel imports introduced by the US to avoid its market from being flooded by Asian exporters that seek alternatives to their ailing US business.
