TARANTO, ITALY, Oct 27 (Reuters Breakingviews) – Word spread quickly that Lucia Morselli was in attendance for Taranto Football Club’s soccer match against Nardo. Photos of the boss of Europe’s biggest steel mill, flanked by bodyguards and the club’s general manager, Vittorio Galigani, zinged across social media, as rowdy supporters of the fourth-division club questioned why she would dare show her face at their beloved Iacovone Stadium.
Her company’s plant occupies nearly twice as much land mass as the coastal city located in the sole of the boot that forms the Italian peninsula. The steel group now called Acciaierie d’Italia is widely recognised by its former name, Ilva, which became synonymous under previous owners for polluting Taranto and sickening many of its 220,000 residents for decades.
The online outcry is emblematic of the difficulty the provincial capital faces as it tries to shed a reputation for being home to poisonous foundries. More broadly, it illustrates a larger struggle as the world attempts to move from the fossil-fuel-dependent present to a carbon-neutral future. This process has been branded a “transition.” The word is somewhat euphemistic, however, eliding over the complex, expensive and socially wrenching challenge of putting the past to rest while moving toward some green, utopian future. Where transitions falter is in the middle, when ordinary people are required to make extraordinary sacrifices.
Taranto’s performance on the pitch that April afternoon temporarily distracted any fans upset about Morselli’s presence. With a 1-0 victory, the hometown team inched closer to an upgrade to the sport’s third division, or Serie C, for the first time in a generation. That’s a big deal in Taranto, where Galigani says only two things matter: “pane e calcio,” bread and soccer.
He knows his local audience well, but there’s something else that weighs even more heavily on Taranto. Much as it would like to be known for its athletics, the natural harbour that attracted colonising Spartans in 700 BC or the inland sea from which Italy’s tastiest mussels are cultivated, Taranto is a factory town. In 1965, state-owned Ilva Group built a massive complex here with the eventual capacity to produce 10 million tons of steel annually for Italy’s growing industrial development needs.
Ensuing decades of poor environmental stewardship at the Ilva facility, first by the state and then private owners, left Taranto with a tragic legacy of death and disease from which the city has yet to recover. It continues to shape politics, cloud economic progress and even roil its sporting culture. Lung cancer death rates were a third higher than normal in districts, like Tamburi, near the Ilva plant, while deaths from respiratory illnesses were as much as 50% above average, according to a 2016 report by a regional health authority.
“When you say you’re from Taranto, the reaction is always: ‘Oh, that’s where Ilva is,’” says Ilenia Lucaselli, a city native and a deputy in parliament with the Brothers of Italy party. It’s physically inescapable, too. To stop the spread of harmful dust from the plant’s mineral and coking fields, authorities forced Ilva to cover them. Two massive white tents of nearly 130,000 square meters each – large enough to fit 18 soccer fields – loom sepulchral-like.
Beyond one small city and the beautiful game, Taranto provides a glimpse into how even developed countries like those assembling at the UN Climate Change Conference (COP26) in Glasgow next week will struggle to make the shift to net zero. If businesses in rich nations like Italy can’t reform their ways, it’s hard to imagine how it will be possible in places like India and China, where steel and cement have long represented a trajectory from poverty to prosperity.
Three characters shape Ilva’s story. Alongside Morselli and Galigani, there’s Rinaldo Melucci, Taranto’s left-wing mayor with a weakness for an afternoon cigar. The former shipping agent, who was elected in 2017, has used city hall as a platform for making Ilva public enemy number one.
In his most dramatic attempt to vilify Ilva, earlier this year Melucci put forward an ordinance to shut down the factory’s super-hot blast furnaces, a primary source of emissions and pollution. The proposal, however, would have effectively shuttered the plant for three years, according to the company. The decision was bitterly opposed by Morselli and Ilva’s owners, the Anglo-Indian steelmaker ArcelorMittal , which is reducing its stake in a deal with the Italian government. The state should have majority ownership after May 2022 if certain conditions are met.
In late June, Ilva successfully appealed a legal decision that supported Melucci’s ordinance, thus allowing the company to keep the furnaces on. But the ordinance had proved popular in many quarters of Taranto, whose citizens are understandably aggrieved by years of lethally negligent mismanagement.
At the same time, Tarantinians are keenly aware that without Ilva’s furnaces blazing, the city’s economy will suffer. The operations in Taranto directly employ around 8,200 people, and support another 9,000 working for suppliers, contractors and other affiliated businesses. It is Southern Italy’s largest private employer.
“It’s a delicate balance between environment, health and work,” says Franco Di Lorenzo, a retired chemistry teacher. “I had so many children whose parents worked at Ilva. Everyone knows someone at Ilva, and everyone would like it to go away at the same time.”
Taranto’s output is critical to the national economy too. Though Italy has fewer than half as many steelworkers – some 35,000 – as Germany, Europe’s largest producer, around 90% of production is used domestically, largely by industrial companies in the north of Italy, according to World Steel Association figures. Germany only uses two-thirds at home.
Melucci understands, and says the proposal was intended just to shut the hottest part of the plant. But it would have essentially ended Ilva’s ability to forge new, as opposed to recycled, steel. Like many leaders of communities hoping to move away from activities deemed dirty or dangerous, Melucci is keen to promote Taranto’s other capabilities.
He wants its 1-million-square-metre port, owned by Turkish operator Yilport Holding, to become a key logistical gateway from the Mediterranean into the heart of Europe, for example. And there are the city’s natural charms, he says, unlatching the French doors of his office, which open onto a balcony overlooking turquoise waters known for dolphin sightings.
“We don’t want to depend any more on that factory; it has ruined the image of the city,” he says. “Other places have moved on from their dirty industrial pasts – think Bilbao or Pittsburgh. Why can’t we? We can’t continue as a colony of the North, making cheap steel for their car and appliances factories, while putting at grave risk the health of our people.”
PITTSBURGH OF THE MED?
Those cities he mentions experienced crippling unemployment rates as their legacy steel and industrial businesses were crushed by increased global competition, higher energy prices and labour strife in the latter decades of the past century. Over many painful years, they managed to diversify their economies through a variety of community and federal, or in Bilbao’s case, European Union, initiatives.
Pittsburgh, which once produced half of America’s steel, worked closely with local universities like Carnegie Mellon, to rebound into a research and technology centre with a flair for creativity. The Andy Warhol Museum opened in 1994 to honour the hometown artist. Its unemployment rate declined from 17% in 1983 to 10% a decade later. It has kept mostly in line with the national average since then, while shedding its reputation for eye-watering pollution.
Bilbao’s Nervión River was declared “ecologically dead” in the 1980s, just as the Basque city, which had been producing iron and steel since before the industrial revolution, was reeling. The 3% jobless rate in 1975 jumped to 25% by 1985. Thanks to a major urban renovation programme, with investments in the port and riverside, where an offshoot of the Guggenheim Museum and a large conference centre today attract millions of visitors a year, the region’s unemployment, at around 11%, is lower than the national average, Eustat says.
Melucci’s desire to remake Taranto is understandable, but hard to square with economic realities. They also appear to run counter to the ambitions of Prime Minister Mario Draghi to make the transformation of the former Ilva a centerpiece of his environmental agenda. The government has devoted some 4 billion euros in its recovery plan to upgrading industrial operations, which includes making the former Ilva Europe’s largest producer of so-called “green” steel.
That’s not just expensive, it’s also, for now, largely theoretical. Steel production remains a messy business dependent on carbon-emitting energy. Iron ore is melted at 1,700 degrees Celsius, alongside oxygen and coke, another form of coal. That double carbon dioxide whammy means about 1.8 tons of the stuff is produced for every ton of steel, reckons Bill Gates, who devotes a chapter in his book, “How to Avoid a Climate Disaster,” to so-called “hard to abate” industries, including steel, that account for 31% of the 51 billion tons of greenhouse gases released into the atmosphere.
Morselli, with strong support from the Rome government, including its new super-ministry for ecological transition, has a plan to make this happen and is working with two key partners. Paul Wurth, a division of Germany’s SMS, is engineering the new greener foundries, while Italian shipbuilder Fincantieri (FCT.MI) plans to construct them. The idea is to eventually use cleaner energy, like hydrogen produced from renewable sources, to reduce Taranto’s emissions.
All that will take time, partly because some of these new technologies are not yet operational. There isn’t enough wind or solar energy available in Italy. And while prototypes for such a hydrogen-powered plant exist, with one being built by H2 Green Steel in Sweden to go live in 2024, there is no large-scale facility up and running.
The project will take some three years to prepare, and that’s before installing the new equipment to remake the blast furnace, which may take another five. Then there’s the cost. Refurbishing foundries will require about 500 million euros, reckons one Ilva executive, with another 1.5 billion euros for the rest of the work. A senior member of the Draghi government estimates the total bill at around 4 billion euros. It’s basically a 2-billion-to-4-billion-euros guess.
Given decades of tainted promises from Rome, Tarantinians are wary of pledges that a greener Ilva will emerge and make the city a shining example of a zero-carbon nirvana. “The old industrial models need to be rethought and the battle is in figuring out what system guarantees the health and economic prosperity of the populace,” Melucci, the mayor, says. “Just going back to a model that was forged in the 18th century doesn’t do that.”
That kicks things back to soccer. Weeks after beating Nardo with Ilva’s boss in the stands, passions were inflamed anew when a 10-by-3-metre banner appeared in the bleachers above the field where the local club’s players were training. It bore Ilva’s new name, Acciaierie d’Italia.
Within two days, the sign – which brought in 5,000 euros of sponsorship money for the cash-challenged team – was gone. Pictures of the banner, trampled upside-down in the dirt, appeared on pages associated with Taranto’s more fervent fans. It was a social media act of violence against the company that was, at last, financially supporting the team.
For the club’s general manager, Galigani, it was a slap in the face. For years the steel company’s owners in Rome and beyond paid little heed to Taranto FC. To have Ilva’s new stewards involved, spending money on sponsorship and backing the team from the stands, was something to celebrate, not protest.
“It was a strong move by Lucia to come with me to the game,” he said over a plate of raw shellfish at La Paranza, his regular on Taranto’s waterfront, where Tarantinians regularly interrupt his dinner to show their support for the team. “Most hardcore fans are happy to see some synergy between the club and the company because it helps: the more resources the team has the more we can spend on players and training.”
DOWN THE FIELD
In June, Galigani seemed to have been vindicated to a degree when Taranto beat Lavello, a rival hailing from a village in Basilicata, and was promoted to Serie C. It’s early in the season, but Taranto is already holding its own, hovering around seventh in its 20-team division, and playing teams from larger cities like Palermo.
The steel mill’s banner is down, though. At the start of the season last month, a visible and vocal cohort of fans showed up at the stadium waving banners and scarves bearing the slogan “Fabbrica Assassina, Vergogna Tarantina,” or Killer Factory, Taranto’s Shame. For now, the club will have to do without the direct support of the city’s largest business. The company says its sponsorship was due to run out in June in any event.
For her part, Morselli is moving the ball forward to remake the mill into something the country can point to as an innovative leap forward for Italian industry. Her three-year plan is being overseen by a new board of directors chaired by Franco Bernabe, the former Eni (ENI.MI) and Telecom Italia (TLIT.MI) chief executive, whom Draghi asked to represent the interests of Invitalia, the National Agency for Inward Investment and Economic Development, an arm of the Ministry of Economy which will eventually control the company.
The mayor isn’t giving up ground. His opposition to Morselli’s plans will play a starring role in his reelection campaign next year: “If Europe isn’t capable of putting people first, there is no hope for the EU. Humans need to be at the centre of economic development,” he says. “What to do about Ilva is a national, global question, not just a local one.”
His attempts to shut down the plant, whether by civil ordinance or sheer political will, may not make economic sense in the near term. He has a point, though. The particulars of Ilva and Taranto are idiosyncratic, but the fight between the interests of federal governments and local communities, to move from a dirty past to a cleaner future, is playing out across the globe. Transitions like this one are hard. Even harder, perhaps, than cold Taranto steel.
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Editing by Jeffrey Goldfarb and Katrina Hamlin
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