Germany’s Leading Steel Producer ThyssenKrupp Warns Country Of Consequences Of High Energy Prices

Germany’s WirtschaftsWoche here (Business Week) reports on German steel and engineering giant ThyssenKrupp’s reaction to rising renewable energy costs, warning that “unless the correct decisions are made concerning renewable electricity, Germany as a location for steel production is in jeopardy.”

ThyssenKrupp is struggling to keep its steel-making operations alive in Germany in the face of skyrocketing energy costs owing to renewable energies, and joins the list of endangered German industries in the famous Ruhr Region, home to heavy industries such as steel and coal-fired power production. The statement by ThysssenKrupp aims “to increase the pressure on the German government,” WirtschaftsWoche writes.

According to Chief Financial Officer Guido Kerkhoff, the company is reeling from hefty losses of almost 8.3 billion euros incurred over the last 3 years, most coming from its US operations.

Although the company is still eking out profits in Germany, much of that is due to the company’s partial exemption from having to pay the feed-in tariffs for renewable energy. But the exemption is being seriously challenged in Brussels on the grounds that it represents an unfair competitive advantage, and thus may be revoked. WirtschaftsWoche quotes ThyssenKrupp’s CEO Heinrich Hiesinger, who in an interview with the Düsseldorf based Rheinische Post said:

Last year ThyssenKrupp paid out 85 million euros in renewable energy feed-in surcharges. If we had had to pay the full feed-in amount, it would have meant a burden of 350 million euros for us.“ That’s more than what the company earns in its European steel plants. As a comparison, in the fiscal year 2012/13, the company earned before interest and taxes (EBIT) 62 million euros.”

Industry is sending a loud and clear message to German lawmakers. Even North Rhine Westphalia’s socialist Minister president Hannelore Kraft is getting the message. Flashback: Read here.