POWER!!!! Fortescue Future Industries, page-6093

"The bottom line is that fossil fuels are accelerating climate change which in turn is making parts of the world uninhabitable."

Starting with the premise the climate change is making parts of the world uninhabitable, that's a worn-out furphy; conditions on the planet are ever-changing and humans have adapted since time immemorial, even without the luxury and privilege of the modern technologies we have at our disposal today.

Then, getting to:

"Carbon Pricing Absence: Currently, polluters (like traditional steelmakers) don’t pay the full cost of carbon emissions, creating an uneven playing field. Green iron, which avoids these emissions, doesn’t receive a financial advantage unless carbon is priced globally."

Well, we could try to levy a carbon tax on steel producers, but good luck getting steep producers in emerging markets (where most of the growth in steel production has occurred for the past decade) doing the same. Which would mean that western steel producers would become even less competitive than they already are and would simply accelerate the already-entrenched process of de-industrialising developing economies.

As for you holding up Germany and Sweden as some kind of models of smart policy, Sweden's industrial output has gone nowhere and Germany's has collapsed:




And to state that Germany are "ahead" in green steel production is simply a falsehood. Germany produces no green steel and the plans to develop a green steel industry there are meeting with push-back from the steel industry itself:



And Sweden has only one green steel plant under construction (Stegra's Boden plant).
(https://stegra.com/the-boden-plant)

But that has already run into technical problems, with the project management team changed last month, at a critical point of the project. Clearly, a red flag.

Having initially been scheduled to be commissioned this year, it is now slated to start production in 2026, with tests on iron pellet delivery still taking place as later as the end of 2026:


[You might blindly accept the pro-renewable propaganda that your selected version AI sprouts forth, but it doesn't take much first-principles research to learn the real story]


"Negative Externalities: The societal benefits of reduced emissions (e.g., climate mitigation) aren’t captured by private investors, making green iron less financially attractive without subsidies or carbon taxes"

Increasingly, countries and societies are more focused on economic basics, such as cost of living, rather than the futile exercise of trying to influence changes in planetary physics.

As that report I posted some weeks ago described, governments in leading renewable energy economies (Germany, Spain California) have spent trillions of US dollars subsidising renewable energy and yet renewables only cover demand less than 10% of the time.

After trillions of dollars spent on renewable energy and storage in those states, renewable energy satisfies all the points on the demand curve between 5% and 8% of the time.

Recall the Share of Demand vs Proportion of Time graphs which were contained in a previous post several weeks ago?



As for the model of Japanese government stimulating the Japanese steel industry and Norway's oil investment, in both those cases the government support was to promote industry that had already proven to be feasible decades before. Green steel (or its failed cousin, green hydrogen) are largely conceptual ideas, with zero precedent for being viable.

If green iron was valued by the market, it would receive a premium price. But it doesn't and never will apart from a select few instances and the reason for this is that ultimately steel is a commodity and any premium priced steel drives up the cost of goods and the world is in no mood accept inflationary pulses when it can be avoided.

In summary, the trouble is that governments have infinite means but are faced with infinite needs that need servicing.

Less ideologically-blinkered commentators would say that funding for issues like healthcare, education, aged care, defence, energy security, etc. are priorities for the national fiscus ahead of promoting selective "captain's pick" potential industries, such as green iron - and has been demonstrated, hydrogen and offshore wind sectors.

The government may just as well as invest taxpayer money trying to find a cure for cancer just as soon as trying to kickstart a totally new industry, such as a new way of making steel, in which Australia has no demonstrated skills capability nor any competitive advantage.

But like I said, you clearly feel strongly about the matter, so my propositional question to you - which you haven't answered - is:

"If the FMG directors and shareholders like you who are true believers in green steel think it is a great business idea that is going to revolutionise the global steel industry, why doesn't the FMG Board simply suspend the dividend indefinitely to fund the construction of a full-scale green iron plant?

Presumably you'd vote in favour of that strategy, right?"

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