Subsidy cuts could derail Thyssenkrupp’s green steel project -labour bosses

DUESSELDORF (Reuters) – Thyssenkrupp’s labour bosses cranked up the pressure on Berlin to help fund a 2 billion euro ($2.2 billion) green steel production site, warning in a letter to Economy Minister Robert Habeck that a further cut could choke off the project.

Reducing subsidies further would trigger a “massive discussion” within Thyssenkrupp’s supervisory board over whether to pull the plug on the investment, the letter, dated May 17 and co-signed by the group’s deputy chairman Juergen Kerner, said.

The conflict lays bare how much industrial heavyweights depend on aid to decarbonise their businesses as well as the need for European governments to ok subsidies quickly to avoid companies from shifting investments or stopping them altogether.

Thyssenkrupp in August made the investment decision for the so-called direct reduction iron (DRI) site at its steel base in Duisburg, provided substantial subsidy commitments by the state of North Rhine-Westphalia and Berlin are being paid.

“There is still no funding commitment and in talks between Thyssenkrupp and (the Economy Ministry) it is becoming apparent that there is massive resistance in Brussels and / or Berlin to approve the promised subsidies,” the letter said.

Thyssenkrupp and the economy ministry had no immediate comment.

($1 = 0.9084 euros)

(Reporting by Tom Kaeckenhoff; Additional reporting by Christoph Steitz and Christian Kraemer; Editing by Friederike Heine)