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First Move with Julia Chatterley
March Underway in France over Teenager's Death; Nvidia Warns against Restricting Chip Sales to China; Delta Plane makes Dramatic Emergency Landing in Charlotte, North Carolina with Nose Gear Up; CNN Gauges Opinion on Putin in Central Moscow; Mercedes Strikes Supply Deal with H2 Green Steel; Parts of Latin America Experiencing Heat & Drought. Aired 9-10a ET
Aired June 29, 2023 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to "First Move" great to have you with us this Thursday. Let me give you a look at what's
coming up this hour.
French fury hundreds arrested after a second night of protests across France nationwide outrage following the killing of a teenage boy by police
in a Paris suburb a protest march happening in Paris at this hour attended by the victim's mother. President Macron calling for calm as he mobilizes
40,000 officers to help keep the peace, we're live in Paris for the latest.
Plus more Moscow mystery high level intrigue is one of Russia's top generals, who is rumored to have known about the weekend's mutiny attempt,
vanishes from view. CNN asked the Kremlin about General Sergey's -- whereabouts we were told no comment more details on that shortly.
And central heating, the heads of the Federal Reserve the European Central Bank and the Bank of England see more rate hikes ahead as global inflation
remains elevated. Fed Chair Powell saying it an ECB Forum that U.S. inflation won't fall to the 2 percent target until perhaps 2025. Therefore
rate hikes this summer are possible.
U.S. investors way ahead of him so little market reaction in response to that green on the screen as you can see there for U.S. stock market futures
and a mixed picture. I can show that to you too across in Europe, a sizable upward revision to U.S. GDP in the fourth quarter of last year helping
sentiment this morning though too suggesting the economy remains resilient, even in the face of those persistent rate hikes.
Growth rising at a 2 percent annualized rate that's up from a previous print or read of 1.3 percent. So that's a huge revision higher. Also today,
chip stocks recovering from Wednesday's weakness after a strong forecast from Micron that fears that the U.S. could restrict the sale of artificial
intelligence chips to China remains. Nvidia warning of the negative future effects of a chip export ban we've got all the details on that coming up
too.
For now U.S. bank stocks also higher pre market after they passed the latest round of Fed stress test. The results suggest that the U.S. banking
system remains strong paving the way for potential dividend hikes from major banking firms.
Lots to get to as always, but first we do begin in France and a massive March is currently underway in protest over the fatal shooting of a
teenager by police. Around 150 police people were arrested last night amid violent demonstrations.
And Melissa Bell joins us now. Melissa, this is a protest against that killing by police of that teenager. But it's also as you've been pointing
out now for some hours today a protest about years, perhaps of perceived maltreatment.
MELISSA BELL, CNN PARIS CORRESPONDENT: That's right, years of pent up frustration that you're seeing even now on the streets of -- Julia to the
Northwest of Paris. That is the suburb where that march is now taking place that was called for by the mother of young Nahel, which is also the part of
Paris to the outskirts of Paris, where this killing took place on Tuesday morning.
Now tonight, once again, authorities are bracing for another night of violence not just there because it's now spread far beyond that to other
cities across France and more specifically those neighborhoods, the suburbs around Paris that have traditionally felt these sorts of grievances most
keenly.
Now, at the heart of all this, of course, is the killing on Tuesday morning of young Nahel a Frenchmen of Arab origin just 17-years-old, particularly
damning to the police Julia was the video that emerged shortly after the stop at which he was killed.
That video at odds with what we now understand the police had initially claimed in their defense that the car had been coming towards them. In
fact, as you can see on the video, young Nahel was killed essentially in cold blood as he tried to drive away from the policeman that has caused a
great deal of controversy as you can imagine.
Because Julia, it goes back to so many other cases of allegations of police brutality that has sometimes or to tragically ended fatally as it did on
Tuesday morning. But allegations of police brutality and of racism on the part of the police and that is always very difficult to speak about here in
France given the traditional ban on any collecting of anything to do with race or ethnicity.
[09:05:00]
That is why you're seeing all of that pent up frustration in those neighborhoods of France, some of the least well off neighborhoods of
France, where you traditionally have a much greater mix of people, and where these things have been felt most keenly, that's been what's bubbling
up.
We've seen it before 2005 comes to mind when it took an entire summer to put out the fires in some of these neighborhoods that had been lit by
similar story two young men trying to flee a police check, who tragically lost their lives.
Again, this pent up frustration out on the streets of -- once again today and likely to take over a kickoff once again, across the country. Tonight,
some 40,000 police officers have been mobilized, Julia.
CHATTERLEY: Melissa that's exactly what I was going to ask you. We were just showing a close up there of some of the individuals that are on that
march today. And it was all kinds of people, children, men, women, all different colors, shapes and sizes of individual citizens that are
protesting this.
And I think it's important to point that out too, across subsection I think of society. Melissa, what are the authorities expecting? Are they're
expecting another evening of protest 40,000 troops is a lot?
BELL: It's a lot. When you consider Julia that yesterday, it was just 2000 police men and women who had been mobilized. It's a huge increase. And it
speaks to the violence that they expect tonight, to spread. Now what we saw overnight was specifically state institutions being targeted.
So you're looking at schools, police stations, anything that represented the Republic, and that's been the message of politicians this morning. This
is not about the state. This is about the misdoing of one particular police officer now being investigated.
In fact, we've just been hearing Julia who's actually now been suspended. That's been the line taken over and over again after this crisis meeting
that was chaired by Emmanuel Macron this morning. Whether or not that is now going to be heard in those neighborhoods where already, you're seeing
it that march, which is moved from outside the police station where it was meant to take place deep into the city, the parts of those neighborhoods,
where so much of this anger is being felt.
And what you're likely to see over the course the evening are those very real frustrations to do with not just long standing feelings or
discrimination but very often allegations of specific instances of police brutality that it has been impossible to pinpoint to label to call by their
name.
Because of these difficulties linked to a proud tradition here in France of secularism, where the state institutions refuse to look at questions of
ethnicity, race, everyone in France is meant to be a citizen equal in front of the Republic that has made investigating these kinds of allegations and
this feeling that you're now seeing it spreading on the streets very difficult indeed, Julia.
CHATTERLEY: Yes, Melissa Bell, thank you so much for that. Questions in the meantime swirling over the whereabouts of General Sergey Surovikin who
according to one unconfirmed report, knew in advance about the Wagner Chief's plan to defy Moscow, Clare Sebastian joins us now.
Clare, there's all sorts of rumors swirling that there's some kind of purge taking place in Russia amid the top military leadership, much of this is
speculation. Can you tie the threads together for us and tell us what facts we actually have to?
CLARE SEBASTIAN, CNN CORRESPONDENT: So just a little bit about Sergey Surovikin Julia, he is a very high ranking commander in the Russian
military for three months at the end of last year, he headed up the entire operation in Ukraine and he's known to be if not sympathetic to Wagner at
least sort of slightly closer to him than the other members of the military top brass, which Prigozhin has reserved a large degree of criticism anger.
And according to "The Wall Street Journal" was planning to capture originally as part of his insurrection inside Russia. Surovikin the only
fact that we know for sure is that we don't know where he is. He has not been seen since the very early hours of Saturday morning when he released a
video message pre-recorded, telling Prigozhin essentially to back off to stop what he was doing with his so called march on Moscow.
Since then, the rumor mill around him has been in overdrive, including an unconfirmed report from the Moscow Times that he might have been arrested
that is very much unconfirmed the consensus now among military bloggers and observers is that he is not in custody.
But we have of course asked the Ministry of Defense Spokesperson say they couldn't say anything. The Kremlin continues to refer all questions to the
Ministry of Defense. There is also speculation Julia around the whereabouts of his Deputy Andrea Uden (ph), a prominent Russian journalist suggesting
that he might have been sacked again very much unconfirmed on that regard.
And he's not the only major figure in this unfolding saga that is yet to be seen General Gerasimov the Head of the armed forces in Russia has yet to be
seen since this rebellion.
[09:10:00]
And Yevgeny Prigozhin himself who Alexander Lukashenka, President of Belarus says is in his country, but we have yet to see actual evidence of
that. So there are still a lot of questions around this.
CHATTERLEY: And we will continue to ask them. Clare Sebastian thank you for that! And heavy hearts on the high seas recovery crews have picked up what
they believe to be human remains from the site of the Titan Submersible wreckage.
The Titan suffered a catastrophic implosion last week, taking the lives of all five people on board, pieces of the vehicle or being transported to
Canada as an investigation into the tragedy continues.
Paula Newton joins us now. Paula, I think it was tough for any of us to imagine what might be brought to the surface when we're using terminology
like a catastrophic implosion. But actually I was quite surprised by the scale; actually of what was being brought up but now that the real
investigative work begins.
PAULA NEWTON, CNN CORRESPONDENT: Yes, so are many of us although engineering experts tell us that look, it's not uncommon given it were an
implosion and not an explosion. Having said that, I think the most significant piece of this Julia is the fact that human remains were found.
This is of course, a somber moment for families, and yet may bring them a measure of comfort. Now, we got that news from the U.S. Coast Guard, who
then said that U.S. medical professionals would now conduct a formal analysis on what they presumed to be human remains.
On top of that we've got the transportation safety board here in Ottawa Julia telling us just late last night that they have finished collecting
relevant documents and completed the preliminary interviews. What's important here is that they say that they have the voyage data recorder
from the polar prints and that was the mothership that for communication purposes was tethered to the Titan that is very important.
They also say that those large pieces of debris that we've been seeing for 24 hours now that are now on shore, that they've catalogued those. They
looked at them and are now in the possession of the U.S. Coast Guard.
The U.S. Coast Guard saying that they will be brought obviously to the United States for thorough analysis. So many investigations going on here
but a week out Julia certainly more clues more evidence that they can delve into further and for so many people that are interested in this perhaps
more conclusively they can determine why this happened.
Whether there needs to be regulatory changes and crucially if any kind of criminal charges need to be brought? I will caution Julia this is going to
take several months if not years to complete.
CHATTERLEY: Yes, and Paula to your point we pray a measure of comfort for their families and the friends of those involved in this. Paula Newton
there thank you!
OK, let's bring it back to business now Nvidia warning of a "Permanent loss of opportunities if the U.S. imposes new restrictions on exporting
artificial intelligence chips to China". Multiple outlets reported Wednesday that the Biden Administration is planning to tighten export curbs
that were announced back in October.
Washington has been increasing its efforts to cut China off from key technologies that can support its military. China is a key market for
Nvidia. The company reported that Hong Kong and Mainland China accounted for 22 percent of its revenue last year.
Rahel Solomon joins us on this. Rahel, it was interesting, the comments that were made by the company suggested that it wouldn't have a short term
impact; it was a longer term problem, because clearly this is a key growth market for them in the future. They can offset what they have today. But
the future matters.
RAHEL SOLOMON, CNN CORRESPONDENT: Right. And it's all about the future in this warning, right Julia? So the Chief Financial Officer of U.S. based
Nvidia saying that she doesn't actually expect any immediate material impact. But this is about future earnings.
And investors seem to share the concern shares were off, we can show you as much as 3 percent in yesterday's session, although they recoup some of
those losses to close at 1.8 percent. Nvidia saying in part that we are aware of reports that the U.S. Department of Commerce is considering
further controls that may restrict exports of our A800 and H800 products to China.
Now, for context here, Julia, some of these chips here that are mentioned were designed with those October restrictions in mind, right? We're trying
to be compliant with these restrictions. And so what we understand perhaps about these expanded restrictions, they would apply to those chips as well.
So it really gives you a sense of with relations being what they are between the two nations between U.S. and China. How difficult the
environment the business environment is for some of these chip makers? Now for the U.S. as part as you pointed out, the government says that it is
concerned about how some of these AI chip exports could be used in the Chinese military?
Unclear at this point Julia what a timeline would be but "The Wall Street Journal" reporting that of course, we know that U.S. Treasury Secretary
Janet Yellen is expected to visit Beijing in just a matter of weeks in fact in early July.
[09:15:00]
"The Wall Street Journal" reporting that this announcement will likely come on the back of that trip so as to not anger unnecessarily Beijing we'll
see.
CHATTERLEY: The problem then, of course, is that it sort of unwinds or damages any progress that's made in that trip so the timing sort of feels
like a moot point. It's a tough line to walk, isn't it between saying that you're not trying to suppress innovation and technological development, but
the worry about the defense applications and to your very valid point there. Rahel, great to have you with us, thank you. Rahel, Solomon!
And a different kind of AI warning this time on preventing bias; the Philanthropist Melinda French Gates says it's critical to get women
involved in the development of powerful AI tools. She told my colleague Poppy Harlow, she's worried women are being left behind in the AI arms
race.
(BEGIN VIDEO CLIP)
MELINDA FRENCH GATES, CO-CHAIR, BILL & MELINDA GATES FOUNDATION: I'm very nervous because we don't have enough women, again, who are computer
scientists, and who have expertise in artificial intelligence and without that, we will bake bias into the system.
Again, the system needs to take all people's points of view and see society and quite frankly see the world writ large as it is, when you have women at
any of these places when you're creating something when you're making this decision when you're setting a law. You're bringing that perspective of
society that is just so vitally important.
(END VIDEO CLIP)
CHATTERLEY: Can't argue with that. Straight ahead on "First Move" a lucky escape for these passengers after their jet touchdown without the aid of a
nose landing gear that. And the 4th of July travel getaway comes after the break. Plus, cleaning up some of our dirtiest industries what does green
steel mean in the push to decarbonize heavy manufacturing we'll explain?
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". U.S. airports are gearing up for the 4th of July holiday getaway and tomorrow could be the busiest day in
the skies since 2020. The Transportation Secretary says despite forecasts of travel problems, airlines are ready.
(BEGIN VIDEO CLIP)
PETE BUTTIGIEG, U.S. TRANSPORTATION SECRETARY: We think tomorrow will be the busiest day of this holiday travel weekend. It may even prove to be the
busiest day for air travel since the pandemic.
(END VIDEO CLIP)
[09:20:00]
CHATTERLEY: United Airlines says its "Hands on deck" after a multi-day scheduling meltdown, forced it to cancel more flights than anyone else.
Days of storms and other problems this week left thousands of passengers stranded. Let's get to Pete Muntean now at Reagan National Airport in
Virginia.
Pete, great to have you back with us. He said that airlines are ready but evidence of the past what several days suggests otherwise what is this
weekend going to be like?
PETE MUNTEAN, CNN CORRESPONDENT: You know, things are getting better there, Julia, but it's not out of the woods just yet. You know, today will be a
huge test for air travel. 52,000 flights, according to the FAA's scheduled to depart today. That's the busiest going into the July 4 holiday weekend
although it's really United Airlines that has been struggling.
They have canceled about 2500 flights and Saturday 7000 flights delayed we've been hearing from passengers stuck in these hour's long customer
service lines to try and get on a new flight. But the problem is all of the flights are already full. They're not even able to get a seat in some cases
until Monday.
So Transportation Secretary Pete Buttigieg really swiped back at this assertion by United CEO Scott Kirby last night on CNN. Buttigieg said it's
totally not fair that Kirby said that this was all on the FAA and its air traffic controller shortage, especially in the New York area United is a
huge hub in Newark, New Jersey.
But I want you to listen now to Buttigieg. He says that he does admit there are some air traffic control shortages. Although he also underscores that
United States don't look in the mirror at its own problems.
(BEGIN VIDEO CLIP)
BUTTIGIEG: United Airlines has some internal issues they need to work through. They've really been struggling this week, even relative to other
U.S. airlines. But where we do agree is that there need to be more resources for air traffic control, the staffing levels there are not at the
level I want to see there.
They don't leave us with a lot of cushion. If you have a few people call in sick or if you have an unusual event it really spreads the system thin and
so what we need to see higher staffing levels there.
(END VIDEO CLIP)
MUNTEAN: Over the last few days, United Airlines has canceled more flights than any other airline. We've really been watching this meltdown in slow
motion, Julia. And it's so key, here is that United is only now really acknowledging its schedule and operational issues.
And put out this statement for the first time saying that its flight attendants, its pilots, customer service reps, baggage handlers will all
work tirelessly to try to get the airline back on track now and the airline also says it will be ready for this July 4th holiday rush and pull it out
of the dive.
By tomorrow, one United was anticipating it could be the biggest day for air travel on the airline since 2019, 5 million passengers United
anticipated the handling in total over the July 4th holiday period although we will see if it ultimately does serve all those people because it's been
canceling so many flights, Julia.
CHATTERLEY: Yes, good luck to all those intrepid travelers out there I'm staying put after not going anywhere near an airport. Can I please speak
to, and Pete, the pilot now and get marks out of 10 for the pilot that managed to land that plane without any of the front landing gear. These are
extraordinary pictures, Pete, score?
MUNTEAN: 12 out of 10 -- .
CHATTERLEY: Wow, exactly 11.5.
MUNTEAN: -- bringing in that Boeing 717 without a nose gear that the landing gear started to come down it appears from some of the video you can
see the nose gear doors they were open in some of the shadows of the video that passengers took as the plane was coming into land.
The crew got an unsafe light that says that the gear wasn't completely down before they landed so they did a fly by at the airport there in Charlotte
then came back around and landed without a nose gear a testament to the skill of the pilots testament to the engineering of the airplane to
incredibly strong it came down in one piece.
Passengers 96 onboard this Delta flight evacuated using the emergency slides. The crew on board got out OK to nobody hurt. That is the big thing
to underscore here. A really, really nicely done job. The only issue was Charlotte is a huge hub. And that runway had to be closed down for hours
until crews could clear that plane off of the runway although the good news now it's open again.
CHATTERLEY: Yes. Congratulations to the pilot few to the crew on all the passengers on board and after secretly say I would have always wanted to go
on one of those slides. But I think on a runway just in a demo would be perfect. Thanks -- real live. Yes, Pete Muntean, thank you for that.
[09:25:00]
OK, time to move on. The CEO of Anheuser-Busch wants to put the past behind it after a partnership with a Trans Influencer led to boycotts and a drop
in sales. The Beer Giant has launched a new ad campaign focusing on its own workforce and suppliers. Bud Light lost its top spot in the United States
market in May, a few weeks after it's sent a personalized can to Trans Influencer, Dylan Mulvaney.
CNN Business and Politics Correspondent, Vanessa Yurkevich is here to explain all, Vanessa, but for those who my audience who may not have seen
what happened, the fallout with Bud Light may not know Dylan Mulvaney. Can you just explain and take us back and explain what happened and what the
impact was on sales as a result?
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, so a few months ago, Bud Light sent one can of beer to transgender activist, Dylan
Mulvaney; she posted it on her social media. And shortly after, there was some conservative backlash about the brands move to center this beer can.
Bud Light really remained silent on it immediately.
They wanted this to blow over but it really picked up steam on social media. You also had the LGBTQ community coming out and wondering why Bud
Light wasn't saying more to support their initial move to send this can of beer. But this, as you said, had impacts on the company beyond just social
media branding.
We saw a Bud Light sales dip about 24 percent. Leading up to the week of June 3, we saw bomb threats and harassment at breweries Bud Light
breweries. And we also have seen that Bud Light is no longer the best selling beer in America, that top spot goes to Modelo. But you had the CEO
speaking out for the first time on CBS yesterday.
And he was trying to move the conversation away from the controversy and looking towards the future by talking about the importance of his
employees, and the 65,000 of them that get together through all the supply chain and try to bring Bud Light to the homes of millions of Americans.
Listen to what he said about how he wants to look at the future.
(BEGIN VIDEO CLIP)
BRENDAN WHITWORTH, CEO OF ANHEUSER-BUSCH: But as we move forward, you know, we want to focus on what we do best, which is brewing great beer for
everyone. Listening to our consumers being humble and listening to them, making sure that we do right by our employees take care and support our
partners and ultimately make an impact in the communities that we serve.
(END VIDEO CLIP)
YURKEVICH: So the partners that he is talking about, there are distributors who have seen losses themselves because of the drop in sales. And part of
what Bud Light has had to do is actually pay some of these distributors 20 to 50 cents per case, because of the losses that they've seen also
reimbursing distributors for fuel, because they transport Bud Light and they are presumably transporting a lot less.
Also, Bud Light has spent a ton of money on new campaign ads, including one that deals with country music and the NFL. And also the CEO in that
interview saying that he plans to increase the investment into Bud Light three fold. He also said that he believes that Bud Light will make it
through this.
One of the big things he said is that he wants to listen to consumers of all types. But he also went on to say that they are still continuing to
support and invest in LGBTQ groups and organizations that they have over the past few decades. But this controversy very much started, Julia, on
social media has had financial impacts on the company.
And yes, the CEO wants to move the conversation forward. But ultimately, the consumer does have the power here. And what we're seeing is continued
decline in sales of Bud Light. So whether or not this blows over soon, too soon to tell a lot of people thought it would blow over in just a couple of
weeks. It's been months now, Julia, the conversations still ongoing?
CHATTERLEY: Yes, it there's so many angles that we could take here. The question of perhaps is as many companies often get accused of either green
washing or pink washing as it's known to having a controversial campaign, then not backing the decision to have it in the first place.
You end up alienating everyone I was going to ask you whether you think this will draw a line to the crisis but I guess we have to see I'm sure the
big questions being asked internally I've got an idea for them. They should now sponsor the Musk versus Zuckerberg cage fight perhaps.
They could even offer to give their advertising to the Twitter or the Facebook winner quite frankly, with testosterone back in the picture. I'm
shaking my head and saying this with a wry smile. We don't even know if it's going to happen. Yes, but that's probably best not to respond to this
-- . Vanessa, good to have you with us, Thank you.
YURKEVICH: Thank you.
[09:30:00]
CHATTERLEY: OK, coming up on "First Move", what ordinary Russians think about the failed Wagner revolt will take you to Red Square to find out,
next?
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move" and you're looking at the view from the top of our CNN studios in Manhattan pretty clear skies at this
moment, but smoke from out of control Canadian wildfires spreading like wildfire across a number of other cities like Washington, D.C. and
Pittsburgh, Pennsylvania.
Chicago also really suffering air quality they're deemed the worst in the world on Wednesday. And a bit of a murky picture too in early trade on Wall
Street as well. Stocks losing most of their pre-market gains on this second to last trading day be it before the end of the quarter, that's an
important date.
All of this as strong U.S. economic data continues to pour in a newly revised growth read shows the economy growing at a 2 percent annualized
rate in the first quarter much higher than initial estimates think that was the yes in the first quarter sorry, double checking that much higher than
expected.
Meanwhile, Virgin Galactic shares are little changed as countdown continues for its first ever commercial flight to the edge of space later today.
Virgin set to take up three paying customers as well as three virgin crew members. And return to our top story today.
Vladimir Putin standing may have taken major hits after the weekend revolt, but we wanted to understand how ordinary Russians felt so we sent our
Senior International Correspondent, Matthew Chance to Red square to find out.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, SENIOR INTERNATIONAL CORRESPONDENT (on camera): Right well, I've come to the center of the Russian capital to try and get a sense of
how this city feels in the aftermath of that attempted military uprising of the week. I can tell you, it feels pretty relaxed. As you can see there's a
lot of Russians, a lot of tourists that have here taking photographs of these iconic sites.
[09:35:00]
I was trying to get into Red Square actually which is just here but you can see there are barricades up and in fact those barricades have been up since
the weekend when that military uprising took place you can just make out the domes of St. Basil's over there. Anyway, back to the people, I thought
it'd be a great opportunity to have a word with some Russians about how secure they feel. Right now, in the aftermath of that uprising.
CHANCE (voice over): People like 86 year old Nikolai unfazed, he told me by events of recent days. Russia is its people, he says, not some individual
show offs, and regardless of what they do, Russia was is and will continue to be strong, he says. But will its leader Vladimir Putin sealed off behind
these Kremlin gates.
CHANCE (on camera): Still be done with it or Putin suggests? -- , you don't know it Mansa. But you know what -- I know many people want to speak to me
about Putin conditioning, -- .
CHANCE (voice over): -- those who would reject the suggestion recently made Vice President Biden that Putin has been weakened by the revolt in Russia.
I think you'll be around for a long time, Cecilia, all the country's resources are in his hands. And there's no real opposition. And there won't
be anytime soon, he says. But now he's in exile, the Wagner Leader who staged and aborted the rebellion appears to be fair game.
CHANCE (on camera): You speak English, right?
UNIDENTIFIED MALE: Yes.
CHANCE (on camera): Great, let me ask you. What do you think about Yevgeny Prigozhin?
UNIDENTIFIED FEMALE: No we don't like him.
CHANCE (on camera): Do you like or you don't?
UNIDENTIFIED FEMALE: No, we don't like.
CHANCE (on camera): You don't like?
UNIDENTIFIED FEMALE: No, we don't like.
CHANCE (on camera): Why -- ?
UNIDENTIFIED FEMALE: I don't know. But he is not good.
CHANCE (on camera): Well, it's pretty understandable. I suppose that Yevgeny what's happened over the past few days. People don't really want to
talk to us that much on camera, because despite what most of them will say to us about everything being fine here.
I think that genuinely is a sense of apprehension about what the coming weeks and months in this country may hold. Matthew Chance, CNN in the
center of the Russian capital, Moscow.
(END VIDEOTAPE)
CHATTERLEY: Stay with "First Move". We'll back after this.
(COMMERCIAL BREAK)
[09:40:00]
CHATTERLEY: Welcome back to "First Move". Now you may have heard of green hydrogen before on this show, but what about Green Steel? Well, in order to
get one you can use the other. That's according toH2 Green Steel.
The firm is in the process of building a plant in Sweden using hydroelectric power to produce green hydrogen that will then be used to
heat the ore in its steel ovens, the plant could be up and running by the end of 2025. The aim is to clean up an industry that's responsible for more
than 7 percent of global Co2 emissions.
And joining us now with Henrik Henriksson, he's the CEO of H2 Green Steel. Henrik, welcome to the show, I had great fun preparing for this interview
going back over old chemistry lessons with iron ore, and blast furnaces. But you're planning to do this a little differently. So explain the concept
of Green Steel and how we get there.
HENRIK HENRIKSSON, CEO OF H2 GREEN STEEL: Yes, so thanks, Julia. So the traditional way of doing this is admitting two tons of Co2 for one ton of
steel. And what we are doing is taking away 95 percent of that. So it's coming down to only 100 kilos for one ton of steel.
And it's basically free platforms. It is green hydrogen that we produce from renewable energy coming from wind and hydropower. We use that green
hydrogen in the process, though, then called DRI, where we replace them the fossil natural gas with green hydrogen. And then we produce a product that
you can call green iron.
And when that is still hot, we push that into a brand new steel mill to produce them Green Steel, so free platforms, green hydrogen, green iron,
and green steel. And the first plant we're building is in Boden, Sweden, location is chosen because there is an abundance of renewable energy at
fair low cost.
And using then the location to build a blueprint, you can save for them, rolling it out and starting it in 2025, 2.5 years from now, and then
rolling out the concept to South America and Southern Europe, but also to North America.
CHATTERLEY: Wide, so no shortage of ambition in terms of how you're going to scale this. The key statistic there for me was the 95 percent. So you're
talking about a 95 percent reduction in the carbon emissions of creating equivalent steel? What about the cost required? Because one of the
conversations we have on the show with hydrogen, green hydrogen is the sheer cost it takes at this stage to produce it.
So in terms of a quantity of steel of Green Steel versus dirty steel, let's call it that. What's the cost difference today?
HENRIKSSON: Yes, so the majority of the cost actually in producing both degree in hydrogen and degree in iron is electricity. So very much depend
on where in the world you are. But in Boden, Sweden, you can say that energy is landlocked, we cannot get it down so as to approve the country.
So we're paying roughly around 30 megawatt per effort to euro per megawatt. And if you base it on that sort of electricity price, the Green Steel will
be around 20 to 25 percent, more expensive than the brown steel. And that is accepted by our customers and customers that are coming mainly from the
automotive industry, but also from construction and building material appliances.
And they see that they can actually get a premium for their products, if they are then truly sort of Co2 neutral when they are produced. And these
are companies that signed up on science based targets that have done their homework. So I will say 20, 25 percent today, they feel it's a fair price,
because they also expect that the price on carbon will continue to rise in Europe, especially with the carbon price we have here.
And there is a strong correlation between sort of the price on carbon and the cost of carbon, and then the premium that we can charge for the Green
Steel. So today is around 20, 25.
CHATTERLEY: So interesting. I know one of the partnerships that you've signed with is Mercedes. Do you think their hope is that they can offset
that full 20, 25 percent of the additional cost of Green Steel just by saying to their consumers who I'm sure are also saying to them, hey, you
know, we were pushing you also to be greener we're willing to pay the additional price for it.
HENRIKSSON: Yes, and I would say that they're actually doing that already, today. There are many of their electrical cars in the European stand sort
of automotive industry. They are sold to the consumer as a Co2 neutral product, but they are paying for certificate, Co2 certificates then at a
cost of around 100 euro per ton of Co2.
So basically, we are replacing the certificates by abating at the core. And so they know basically what the willingness from the consumers is to pay
for that.
[09:45:00]
That car or that truck or that fridge or the freezer that our customers known. And I think on that side, that means that it's not 25 percent more
expensive on the total product, because when you break down how much of the bill of material that is steel, in these products, the car or the fridge.
It turns out to be around 2, 3 percent that you affect actually the price or the total value of the product and that they say OK, maybe that's
acceptable to our customers. So, they will push it through.
CHATTERLEY: Are you talking to other automakers as well?
HENRIKSSON: You asked it, I think there is a strong interest we have signed contracts already with BMW and with Mercedes and there are more to come.
There are we have also signed with every commercial vehicle suppliers, like Scania. And also then this tier one supplier's towards the automotive
industry. So companies like Schaeffler, Sedef, and Bill Stein in Germany.
But also steel re-rollers like Marcegaglia, for example, a big supplier also into different industry. So, yes, I think it's a broad range. And the
one common denominator with all customers is that they've signed up on science based targets. So they have good control of the scope, one, two,
and also scope free upstream.
So they've done their homework. And I think that has been that way for us to segment the market. And they're all first movers in their respective
industry.
CHATTERLEY: Yes, something that you said before that caught my attention as well. But we sort of moved on from it. And I was going to ask you, by the
time you're up and running by 2030, really producing 5 million tons of Green Steel, I believe is that is the target. How the price of producing
green hydrogen and Green Steel will have adjusted?
But I think, more important point was that, by that point, with regulation with the challenges of reporting what your carbon emissions are, actually
the cost of producing carbon is going to be that much higher? So it's that trade off that matter. How do we scale this, Henrik? I mean, 5 million tons
is important. But what it's 3 percent of world's steel production, we need to do this on a far greater scale.
HENRIKSSON: Now, you're right. So I mean 5 million ton is 5 percent of the European market.
CHATTERLEY: Yes.
HENRIKSSON: So I think what our purpose as a company is to de-carbonize -- industries and we start with the steel. So we do not see our self as a
disrupter of this industry rather than enabler. And what we have done now is we have shown that there is a market for Green Steel, there is a premium
for it.
We have created a definition with our 25 customers. And we've shown that it's technically possible, and you can actually finance a project like
this. With a startup, we now no balance sheet, no income statement, and we can find 5.5 billion U.S. dollars to get this off the ground.
And we're already building the factory. So I think we've shown the income, but guys, it's possible. And they are following now, which I think is very
positive. And it takes maybe a little bit longer, a little bit slower, because they have a lot of assets that they of course need to cater for and
adjust to.
But so I think that the scaling here will already sort of start moving now, when we see that it's possible, but the real scaling, I think, will not be
to do exactly what we do. I think it would be rather than keep the existing steel industry that so called downstream where you do sort of the
rerolling.
And then instead of importing iron ore to Europe, and I think to North America, and so on as well, you should import the product that comes out of
our second platform. So the so called green iron and that is a product that you can ship around the world. It's called Green HBI, green hot briquetted
iron.
And I think that will be the quickest way because then you can reuse a lot of the assets that's in the industry are already the technology, the
competence, the knowledge, and that would be the quickest way for us to really move this industry up to 2030.
CHATTERLEY: I'm scribbling down notes green iron needs to do more research on that. And you made the point that actually it's quite easy to get the
financing to start producing this and building a factory as we discussed, a banks willing to lend to you because you're trying to green up a dirty
industry because they themselves also are trying to move away from dirtier parts of their loan portfolio as well. How hard is it to raise money and
what's the path to profitability because you've raised that to do this?
HENRIKSSON: Yes, I wouldn't say that it's easy when you don't have the -- Power Point and you don't have a factory, so I think a really good sort of
game changer has been that we managed to pre sell half of our production and we did that on so called take or pay contracts which actually means
that the customer have to take the volume regardless of what happens.
[09:50:00]
And they are seven year contracts with these big names and that is the collateral for our banks to lend us the money. So I think that has been a
very sort of strong pillar in our debt structure so first European banks, first class European banks standing for that together with some export
credit agencies.
That's the debt side, the -- equity side, I think is the same sort of mindset, the true north of sort of companies and funds that want to drive
the transformative, sustainable industrial Green Revolution, and they are doing it with dedicated funds. And I think they're doing it, yes, to clean
up maybe some of the conscious.
But I think also that they're investors on their side, and they are keen on seeing this transformation. So there is money available, yes, but I think
doing it without sort of a balance sheet from the beginning, is of course, a challenge, but that we have managed now to put together the debt side.
And we just conclude in the deck with the side and the first product is 5.5 billion euro done and start a production end of 2025, you will see a
positive cash flow roughly 18 months after that. So it's quite a powerful business case as well. So it's not only sustainable and resilient for the
future, but it's also highly profitable.
CHATTERLEY: Got to make some money.
HENRIKSSON: Yes, now asking to reinvest in follow up -- .
CHATTERLEY: I'm going to get yelled at. I've got to wrap up the conversation. I could keep you talking for an hour. Yes, I love my job on a
daily basis, but fascinating conversation, sir. Thank you so much. We'll speak again soon. Henrik Henriksson, the CEO of H2 Green Steel, thank you.
We'll back after this.
(COMMERCIAL BREAK)
CHATTERLEY: Latin America sent me breaking temperature records this year and it's coming at the cost of lives and severe drought across many areas.
Rafael Romo has more.
(BEGIN VIDEOTAPE)
RAFAEL ROMO, CNN CORESPONDENT (voice over): Boats that used to be on water are now lying on grass. Residents can now walk where they used to be able
to swim. This is an Alajuela lake which serves as a reservoir for the Panama Canal. There used to be boats right here where we are this nearby
resident says water came this far.
A severe drought has forced the authorities in Panama not only to implement water saving measures, but also to impose restrictions on cargo ships
crossing the key global trade routes.
ROMO (on camera): Panama is the latest example of countries in Latin America having to deal with severe drought conditions. A report published
by the European Commission states that precipitation deficits above average temperatures and recurrent heat waves are causing one of the worst droughts
in decades in the region.
In the fall of 2021, in the spring of the following year, low water levels at the Parana River which flows for nearly 4900 kilometers 3000 miles
through Brazil, Paraguay and Argentina cause cargo ships to stop delivering goods.
[09:55:00]
CHASE HARRISON, AMERICAS SOCIETY/COUNCIL OF THE AMERICAS: The situation in Argentina is unprecedentedly bad they're having the worst drought
conditions in 75 years and we're seeing those conditions exist in neighboring countries as well. Chile, having the worst drought conditions
in 50 years, and -- having the worst drought conditions in 80 years.
ROMO (voice over): Mexico is now recovering from a late spring heat wave. And last summer, President Andres Manuel Lopez Obrador declared that
emergency in the northern state of Nuevo Leon due to lack of water, a situation that experts believe aggravated conditions that have pushed many
Mexicans to leave their country.
HARRISON: So if we have large scale movements of peoples from one place to another, it's going to put a strain on the social services of those
countries. It's also just going to create economic dead areas in some of these countries where there cannot be business.
ROMO (voice over): An analysis by grow intelligence published in 2021 concluded that Mexico's corn crop is threatened by the country's most
widespread and intense droughts in nearly a decade, and tight corn markets are likely to transmit the shockwaves worldwide.
Back in Panama, the government agency that manages the canal, imposed draft restrictions, meaning cargo ships with a very low whole can't transit,
which may slow the delivery of goods worldwide. Rafael Romo, CNN Atlanta.
(END VIDEOTAPE)
CHATTERLEY: Oh times more than up Becky Anderson's up after this stay with CNN.
(COMMERCIAL BREAK)
END
