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Europe Wants Green Steel but Can't Afford It
Europe Wants Green Steel but Can't Afford It

Yahoo

time29-06-2025

  • Business
  • Yahoo

Europe Wants Green Steel but Can't Afford It

The European Union has pledged billions in rearmament spending. It also just pledged billions in higher NATO spending. Steel is a crucial part of the rearmament drive. Without it, you can't build tanks and make weapons. But Europe does not just want any steel—it wants it green. And green steel is so expensive, companies are walking away from green steel projects in droves. This week saw one of the world's largest steelmakers, ArcelorMittal, ditch its plans for the conversion of two plants in Germany to green hydrogen as an energy source because the costs were exorbitant. Importantly, the German government had promised the steelmaker $1.5 billion in subsidies for the conversion projects. Still, they turned out to be too expensive. Germany's ThyssenKrupp, meanwhile, is sticking with its green steel plans, although it noted the 'crisis' in the industry. At the same time, ThyssenKrupp is laying off 40% of its workforce and slashing production capacity by a quarter, the Financial Times reported at the end of 2024. 'The first electric arc forges are being built in countries that can offer competitive and predictable electricity provision,' ArcelorMittal said, as quoted by Reuters. 'Electricity prices in Germany are high both by international standards and compared to neighbouring countries.' There are two ways to decarbonize steelmaking, which is an important point on the EU's net-zero agenda. One way is hydrogen, and more specifically, green hydrogen, produced through electrolysis, enabled by wind and solar power. The other way is swapping blast furnaces fueled by coal to electric arc furnaces, fueled by, once again, wind and solar. Those electric arc forges that ArcelorMittal was referring to are being built in nuclear-heavy France. Because nuclear is cheap and reliable. Wind and solar appear to be the opposite of green hydrogen is several times costlier than any other variety. The reason is that electrolysis is, somewhat ironically, an energy-intensive process that uses electricity generated by wind or solar installations to split water molecules. Despite its net-zero desirability, the process cannot violate the fundamental laws of physics, meaning that the end product, in terms of energy, is considerably smaller in volume than the amount of energy expended on producing it—which is why green hydrogen's cost is unlikely to come down anytime soon. It is that cost that is sapping industrial appetite for making the switch from hydrocarbons to green hydrogen. 'The business case for green steel is not there in Europe,' the head of Eurofer, the EU's steel industry association, told the Financial Times. Some still had hopes for the future, Alex Eggert noted, but others had given up with 'I don't have time for this.' Europe itself does not really have time for this. Europe has stated quite clearly it plans to build a lot of things that require steel to replenish its depleted reserves after sending most of its inventory to Ukraine. And it needs to do that fast, based on its own claim that Russia is about to invade. But at the same time, Europe wants to do its rearmament in a green way—which is at odds with the need for speed. The problem becomes even bigger in the context of broader steel production. Steel is not only essential for weapons production. It is essential in construction, too, and a myriad other industries that feature the construction of something or other, up to and including wind turbine installation. Europe, then, needs a lot of steel—and it wants to reduce its import dependence by producing more of it locally, but also cheaply. Once again, the EU is trying to do two mutually exclusive things at the same time. The cost of electricity in the countries with the highest portion of wind and solar in their energy mix should proof enough that the transition is anything but cheap, and yet this fact continues to be overlooked in favor of ever more subsidy commitments and claims that ultimately this low-carbon energy will become cheap. The steel industry clearly does not have time to wait for this to happen. The steel industry is prioritizing energy affordability over emission footprints. Because the steel industry has realized that there is no other way to survive, especially with cheap, emission-heavy imports from China flooding the market. The EU introduced the carbon border adjustment mechanism to stem that flood. In fact, it introduced the carbon border adjustment mechanism to stem the flood of all sorts of cheap imports that undermine the competitiveness of European products—because of high energy costs. The EU is using CBAM to treat a symptom, and not the root cause of the energy cost disease. That root cause is the urgent transition. 'In the end, we will also have to discuss how quickly the transformation can take place, because the speed largely determines the cost,' RWE's Markus Krebber said this week, as quoted by the FT. It was this speed that prompted the conversion of 40% of Europe's steelmaking capacity to electric arc furnaces. It was this speed, and the lack of any desire for long-term planning that prompted talk about green hydrogen as replacement for coal. Now, the jig is up. Europe must decide between rearming and net zero. By Irina Slav for More Top Reads From this article on

How prepared is Ireland for the knock-on effects of a future war?
How prepared is Ireland for the knock-on effects of a future war?

Times

time29-06-2025

  • Business
  • Times

How prepared is Ireland for the knock-on effects of a future war?

Ireland's decision to sign up to the European Union's €150 billion weapons fund was greeted with typical fanfare last Friday when it was announced by Simon Harris. The move, the tanaiste said, would allow Ireland and other countries to streamline the procurement of arms and defence systems. 'I am determined to provide for the development of a full spectrum of Defence Force capabilities that will bring Ireland in line with other similar-sized European countries,' Harris added. Europe is embarking on a mass rearmament because of the worsening security situation on its eastern borders and across the globe. The bloc announced the creation of a €150 billion fund called Security Action for Europe (Safe) in response to Russia's full-scale invasion of Ukraine and the fact that America is no longer a reliable guarantor of European security as it turns its focus instead towards China, where the communist regime is building one of the largest ­militaries in the world. Defence spending across the EU is surging­, with Nato members last week pledging to allocate 5 per cent of their GDP to defence amid rising fears of a potential war on the continent. This marks a sharp increase from last year, when only 23 of the alliance's 32 ­members were meeting the existing 2 per cent target. For its part, Ireland will spend €1.35 billion on defence this year, up €100 million on 2024, but amounting to only about 0.2 per cent of GDP. Is this enough given Ireland's vulnerability and stated position of neutrality? And is the country prepared for a coming war? The answer to both, in short, is no. Friday's announcement came amid ongoing government efforts to formulate strategies to address a worsening security landscape, compounded by decades of underinvestment in defence. The coalition­ has also struggled to educate an electorate that often conflates neutrality with protection, overlooking the state's inability to defend itself. Few Irish people think about serving their country by joining the military. The government and the military have promised but failed to revitalise the reserve Defence Forces. It is difficult to exaggerate the scale of the polycrisis facing the tanaiste, who is also the defence minister. Harris faces inertia in both the Department of Defence and the military, which is struggling on almost every front. And like militaries across Europe, the Defence Forces struggle to recruit and keep staff and even to put patrol vessels out to sea. Some of these patrol vessels are confined to port for months. • Alex Massie: It's time Ireland started to pay for its defence As of May 31, there were 7,468 Irish military personnel compared with 9,480 in 2010. ­Numbers within the Defence ­Forces have fallen nearly every year between 2010 and 2024. The Air Corps has no combat jets but does have maritime patrol aircraft. The Naval Service has a fleet of vessels but does not have the staff to put all but a few to sea. Crucially, the government and the general staff of the Defence Forces are not battle-hardened. They have no real experience of dealing with a conventional or hybrid attack. There is no single scenario for the outbreak of war in Europe but it could begin with a Russian attack on the continent's eastern borders, though it is more likely to be hybrid in nature with the Kremlin using terrorist groups, cyberattacks and sabotage to try to upturn European society or provide an excuse to take action. However, it could also involve an attack on a weak state such as Ireland, whose isolated location on the EU's western border in the north Atlantic makes it vulnerable. Neutral countries have no protection in war. • 'Ireland must recruit tech workers to counter Russia cyber threat' 'The Atlantic was and will always be challenged by Russia's north Atlantic fleet. If the UK currently feels threatened by Russia, why should we think Ireland is not?' said Riho Terras, an Estonian member of the European parliament and a former military officer. 'If Russia keeps on rearming at its ­current pace, pretty soon Europe and Nato will not have the ability to handle it. The Kremlin looks for weak spots. It's hard to understand why Ireland thinks it won't be impacted. Europe really does need to stop figure-skating when Putin is playing ice hockey,' Terras added. If a conventional attack were to occur under a dubious pretext, Ireland would be forced to seek assistance from other EU states and Nato as it does not have any capability to defend itself. Before Friday's announcement, the government was already trying to rearm the Defence Forces but struggling to make progress. It has announced the acquisition of sonar and primary radar systems, but this is not new technology and will also take years to become operational. 'We are spending €60 million on new technology we should have bought decades ago. The new maritime patrol aircraft we bought for €250 million have no anti-submarine kits because the department didn't like the sound of anti- submarine warfare equipment,' one retired military officer said. 'The sonar system we have bought has to be towed on a ship but we cannot put naval vessels out to sea. 'It's akin to the gardai celebrating getting­ flashing blue lights and sirens attached to patrol cars when they have no drivers. Nothing makes any sense,' the source added. 'If war breaks out and Russian submarines are entering our waters to sabotage undersea cables or attack Britain, we are powerless to do anything. This is very similar to the years leading up to the Second World War. We are not at the back of the queue to acquire military equipment — we are not even in the queue.' Like many other announcements on defence, the decision potentially to use the EU Safe fund to acquire arms and military­ equipment may turn out to be unnecessary. Money is not the issue with increasing Ireland's preparedness; it is decision-making. Ireland's acquisition of new sonar and primary radar was made without EU funding. A decade ago, Ireland signed a similar memorandum of understanding to allow for joint procurement with Britain but did not use it. Terras warned that the Safe programme might not even work. 'No EU country has to use it. If large and important countries like Germany don't use it, Spain and the rest of them won't either. It's a loan facility for those who need it,' he said. The announcement by Harris came amid government moves to restructure oversight of defence. It has announced the formation of a ministerial group, a revamped national security committee and the rebranding of the National ­Security Analysis Centre (NSAC), set up six years ago to advise the taoiseach on national security. The new group is chaired by Micheál Martin, the taoiseach. Harris attends, as does Jim O'Callaghan, the minister for justice, along with the secretaries-general of the relevant departments, the garda commissioner and the chief of staff of the Defence Forces. It is scheduled to meet every quarter, while the national security committee can meet on a more frequent basis. But many familiar with these entities describe them as 'old wine in new bottles'. The NSAC is widely considered to have been an abject failure. Various iterations of the national security committee took no action to stop the expansion of the Russian embassy when it sought planning permission, essentially to build a spy base in Dublin. Others point out how no action was taken when Russia's intelligence services managed to recruit an agent, codenamed Cobalt, inside the Oireachtas, who still remains in place. Neither Martin, Harris nor O'Callaghan have any real understanding of ­Russia and its determination to undermine the EU for strategic purposes. ­ Harris is also struggling to overhaul the Department of Defence, though he has been credited with making decisions and pushing ahead with investment projects, often in the face of bureaucratic inertia. 'Harris is making decisions and he's getting projects across the line but he's struggling with the department and the military. He's making the right decisions when something is put in front of him but he's one man trying to reform a dysfunctional system,' one insider said. There are other problems that illustrate Ireland's unreadiness for war in Europe, according to Eoin McNamara, a defence researcher at the Finnish Institute of International Affairs. 'There are now long queues to buy military equipment around Europe, such is the demand because Russia is rearming at exponential speed,' he said. 'Time is not on Ireland's side. Decisions are not being made fast enough. Most countries, if they can't find an ideal defence system, are going for the second-best option, but Ireland isn't doing this.' Unlike other EU states, Ireland has failed to nurture a defence industry, though it urgently needs one. The government and the military have yet to demonstrate any novel thinking in terms of how to use new technologies to defend its citizens. 'Ireland is a small country that needs to think more about technological solutions to defend itself,' said McNamara who noted how Ukraine had shown the world how a country could defend itself through its own resources. Ukrainian-manufactured drones have inflicted the majority of casualties on the battlefield. 'Defence is a driver of innovation. Within Ireland, we could do something similar here and build a fantastic industry around defence technology. We need to recognise what's happening as an opportunity,' said Fintan Buckley of Ubotica Technologies, an Irish defence company specialising in artificial intelligence platforms for satellites. Ubotica's Space:AI system can detect, classify and track vessels, even those operating off the grid, to provide maritime situational awareness from space to seafloor. 'The initial response by the government to what's happening has been about getting more boots on the ground and more boats out to sea, but long term it needs to think about how we embrace technology to provide security to protect our critical infrastructure,' Buckley said. 'We need to foster a closer relationship between our Defence Forces and industry to help foster new technologies. We do this in other industries but we need to do the same with defence.' However, many experts believe that Ireland's greatest security vulnerability — one that arguably leaves it more exposed than its European neighbours — is that Russia, after years of intelligence-gathering in the state, already knows all of the above.

European NATO states wary of buying US arms
European NATO states wary of buying US arms

Russia Today

time27-06-2025

  • Business
  • Russia Today

European NATO states wary of buying US arms

European NATO members have expressed growing unease about increasing their reliance on US weapons amid a sweeping rearmament push, Bloomberg has reported on Friday. During a summit in The Hague this week, NATO states committed to raising military spending to 5% of GDP by 2035 to counter what they described as a 'long-term threat posed by Russia to Euro-Atlantic security' – a claim that Moscow has repeatedly denied. Concerns have reportedly emerged about deepening dependence on the American defense industry, particularly under the leadership of President Donald Trump. According to Bloomberg, leaders fear they could be exposed to greater risks, especially in light of Trump's efforts to improve ties with Russia and past threats to annex allied territory. Boosting reliance on US arms has become 'an increasingly hard sell at home,' the outlet noted. French President Emmanuel Macron has long championed the idea of securing greater defense autonomy for European NATO states, urging the development of a self-sufficient military industrial base. Canada, a key NATO ally, is reportedly reconsidering its involvement in the US-led F-35 fighter jet program and may switch to Swedish alternatives. 'We should no longer send three-quarters of our defense capital spending to America,' Canadian Prime Minister Mark Carney stated earlier this month. Copenhagen has also displayed some resistance, telling Washington that American arms deals have become 'politically difficult' given Trump's suggestion that the US annex Greenland, which is currently controlled by Denmark, Bloomberg reported. Unease in the alliance has also been stoked by Trump's move to cut intelligence sharing with Ukraine earlier this year. According to unnamed officials cited by Bloomberg, this decision 'alarmed allies,' as it raised concerns over how much control the US might wield over weapons exports in the event of a crisis. Nevertheless, a lack of viable domestic alternatives continues to bind European nations to US suppliers, according to the outlet. Decades of underinvestment have left Europe's defense manufacturing capacity underdeveloped. As a result, countries will likely keep buying American equipment to meet rearmament targets, particularly as stockpiles have been depleted by shipments of military aid to Ukraine. Moscow has condemned the EU's militarization trend and arms transfers to Kiev, characterizing the conflict as a NATO proxy war. President Vladimir Putin has dismissed NATO's concerns of Russian aggression as 'nonsense,' instead blaming the alliance's expansion and 'aggressive behavior' for escalating tensions.

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