Shares in giant German materials engineering conglomerate Thyssenkrupp fell 5% Monday after the company’s management warned it may have to cancel a heavily-subsidized project to produce…wait for it…green steel!
Carnival Barker: Yes, friends, step right up and see how the making of steel can be classified as being “green” for government subsidy purposes if only you can fire it by burning oh-so-clean hydrogen instead of all that oh-so-dirty natural gas or - horror of horrors! - nasty black coal!
Enter Thyssenkrupp, whose management, desperate to ward off green protesters, inconvenient shareholder initiatives, and the ESG police from both the German and EU governments, decided a few years ago to mount such a project to covert one of its steel plants to hydrogen. In doing so, the company has already benefitted from more than 2 billion euros in German government subsidies, much of which it would have to repay if it were to cancel its dreamy green initiative.
But management appeared to be close to capitulation on an investor call Monday, because - again you must wait for this one - “the planned direct reduction site in Duisburg could cost more than initially expected,” as reported by Reuters.
Man, nobody could have possibly seen that one coming!
Here’s a key excerpt from the Reuters story:
"We are continuously examining the best and most economically viable solutions under the given conditions in terms of technology and results in order to make Thyssenkrupp's steel business climate-neutral in the long term," it said.
The comments came in response to a report in German business daily Handelsblatt, citing internal documents as saying the group was considering halting a 3 billion euro ($3.3 billion) hydrogen-based direct reduction project that forms the core of its decarbonisation strategy.
…
Around 2 billion euros of the project's funding comes from the German government and the state of North Rhine-Westphalia, where Thyssenkrupp is based, and TKSE said possible cost increases had no impact on the subsidies.
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Meanwhile, a Bloomberg report contains this important nugget of troublesome information:
The German steel company is considering halting construction of the planned direct reduction plant, which could trigger the repayment of government subsidies worth around €500mil (US$549mil), Handelsblatt said, citing unidentified company sources.
The government has started talks with the company over concerns its ailing steel unit wouldn’t be able to reimburse the funds on its own, the report added.
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Oh.
Should we be in any way surprised when a government policy-induced insane misallocation of capital results in financial carnage to corporations so eager to feed at the public trough? Of course not. Yet, you can be sure that German and EU officials will look at what has happened here to a once proud, venerable industrial powerhouse and conclude the solution is - you guessed it - more subsidies.
It is a special form of madness.
This is the sort of financial and economic insanity that is happening all over the western world, and in fact is happening on steroids in the United States. The only thing certain is that the insanity will continue to grow unless and until the people rise up and toss the globalist idiots out of power.
Americans have their chance to do exactly that on November 5. It may be the last chance we ever have.
That is all.
Of course, no sane person is the least bit surprised. This is the inevitable consequence of one group of morons (supposedly educated experienced businessmen) follow the dangling carrot of another group of morons (politicians) who follow ignorant know nothings (climate fascists) exemplified by an ignorant, brain washed, unstable child turned raging shrew (Greta Thunberg).
I bet you could write about absurdities like this every day. Oh, wait, you do!
What does “direct reduction” mean?
Thank you!