Day: 27 April 2026

Leading steelmaker ArcelorMittal has revised its long-term decarbonisation strategy to be “flexible and adaptive,” as outlined in the group’s 2025 Sustainability Report, with future electric-arc furnace (EAF) investments only to be reviewed upon completion of its existing transformation projects.

According to the report, the steelmaking group “intends to sequence capital-intensive decarbonisation projects to maintain financial discipline,” and so will not initiate next EAF investments until “Dunkirk is closer to completion.”

Dunkirk EAF project

In February, ArcelorMittal announced a  EUR1.3 billion investment in a new 2 mt/y EAF at its Dunkirk steel plant, now positioned to serve as a reference point for the group’s future EAF decarbonisation projects. As described in the report, the new EAF will replace the smaller of the site’s two blast furnaces (BF3) once operating at scale, expected to ramp to full production by 2030-2031 with first productions in 2029.

The new EAF will be capable of producing flat steel with emissions of 0.6t CO2e/t, fed with 60% recycled steel scrap, 20% direct-reduced iron (DRI), and 20% hot metal from the surviving blast furnace.

ArcelorMittal is also progressing European EAF upgrades or expansions in Luxembourg, Spain, and the US, and expects to add 3.4 mt of EAF steelmaking to its global operations by the end of 2026.

A new sustainability strategy?

McCloskey’s Global Green Steel Profiles and associated commentary illustrate how the scope and ambition of ArcelorMIttal’s decarbonisation commitments have reduced over time, with its Dunkirk transformation project originally to include green DRI production capacities, and projects at its German operations suspended entirely.

While the steelmaking group claims a 47% reduction in its carbon footprint since 2018, it clarifies that this reduction comes in large part from assets divested and decommissioned over the period, with said assets averaging a carbon intensity of around 2.5 t CO2e/t against the group’s post-divestment footprint of 1.79 t CO2e/t.

As outlined in the report, ArcelorMittal is “reframing” its decarbonisation strategy, “to reduce the risks and capture economic opportunities from the new value pools the energy transition brings.” The strategy is broken into three themes:

1. Renewable energy investments
2. Materials and solutions
3. Transformation of operations

Reinforced by its new “sequencing” strategy for its EAF replacements, the steelmaking group appears to be prioritising revenue generation in new low-carbon markets over its own transformation: via direct investments in renewable energy capacities in the Americas, or the development of product portfolios targeting low-carbon energy infrastructure demand (such as electrical steels).

ArcelorMittal has also relaxed its decarbonisation target across its operations to a 10% reduction by 2030, reducing ambitions from its prior 25% target, stating the new figure represents “a realistic pathway rather than an aspirational or policy-dependent target.” The group maintains its 2050 net-zero target, arguing that once “tipping points” (citing “ultra-low round-the-clock electricity prices”) are reached “the footprint of the steel industry can change quite rapidly.”

New policy pursuits?

Indeed, while ArcelorMittal has previously conditioned further decarbonisation investments in Europe on policy remedies to competitiveness burdens on the continent – namely import pressures – the steelmaker appears to have moved the goalposts again, now formally stating that no further EAF projects would be engaged until the Dunkirk project nears completion in 2029, currently limited by energy cost fundamentals.

In fact, the steelmaker explicitly celebrates recent policy efforts from the European Commission in facilitating the Dunkirk EAF investment case – “very appreciative of the time that European leaders have dedicated to developing policy that supports the industry” – and cites the EU’s incoming steel trade quota intensification and CBAM as having direct influence on the decision. Contrastingly, however, ArcelorMittal argues that the laggard pace of necessary infrastructure for the green steel transition: at-scale green hydrogen and carbon capture technologies; combined with European electricity prices well-above the $30/MWh considered viable for green H2-DRI production, mean that the “deep decarbonisation” of ironmaking in Europe remains structurally unworkable, and is “likely to remain challenging in the next decade.”

Naturally, the steelmaker does reserve the possibility of expediting any new EAF investments “should the policy environment demonstrate further positive momentum,” and expresses its support for a revision of the phase-out trajectories of both ETS free allowances, and the ETS cap itself (currently phasing out entirely by 2034, and 2039, respectively). Whilst ArcelorMittal celebrates the implementation of CBAM and supports its expansion, it qualifies this backing in stating that actual impacts from the carbon leakage instrument will remain unclear until declarations come due in 2027.

In sketching out its ‘vision’ of ideal decarbonisation progress and climate leadership – allegedly unrealised – ArcelorMittal outlines how first-moving regions (like the EU) would adopt ambitious climate policies to “set regulatory norms and stimulate innovation,” bearing higher costs, but rewarded with advantages in “technology leadership, green industry development and regulatory influence globally.”

These advantages would then compound in scaling “from policy experimentation to global deployment” before reaching “system normalization,” facilitating the passing on of decarbonisation’s higher costs to consumers, at which point decarbonisation becomes “structurally embedded in markets, rather than driven primarily by policy mandates.”

However, ArcelorMittal argues that this ideal “has not translated into reality,” seeing the EU as increasingly solitary in its policy ambitions, citing member state divisions as evidencing the fault in the EU’s positioning as “the stalwart of ambitious climate policy.” One could question whether the steelmaker’s emphasis on the need to wait for evidence of CBAM’s actual impact on markets should also apply to patience for the instrument’s stimulation of global decarbonisation and carbon pricing – especially given ETS operators have had comparatively had decades of warning on carbon cap and price trajectories.

As such, directly or indirectly, ArcelorMittal’s report appears to centralise the EU ETS as domestic steelmaking’s next favourite burden – be it on the carbon price’s role in inflating electricity costs, or in reducing the competitiveness of traditional steelmaking such to undermine decarbonisation investment capacities.

The political will to adjust the ETS appears to be there, as demonstrated by the EU’s summer review and signals from Commission and Member State leaders, but movements to relax ETS phase-out trajectories are likely to face resistance from other members of the European steelmaking lobby, further ahead in their decarbonisation timelines. These steel producers, managing either transformational or greenfield low-carbon projects, have in many cases already committed to a low-carbon investment case on the basis of existing fundamentals, including existing carbon price, EUA cap, and free allocation trajectories.

A source with knowledge of the debate tells McCloskey that domestic steelmakers are already at odds on how to position their influence as related to the upcoming ETS review, suggesting that dividing lines between the two camps fall where companies have already initiated their decarbonisation investments and projects, versus those further behind in their low-carbon transition.

Author: Benjamin Steven

opisnet.com

The EU’s agreed draft detailing upcoming intensifications to its existing steel trade protection framework will retain quota carryovers for its initial year, and apply to all trading partners, according to the draft document seen by McCloskey on 24 April.

The European Parliament and Council recently agreed via trilogue negotiations on the final compromise text to be tabled under the Commission’s original regulatory proposal, which seeks to double the bloc’s base steel tariff rate to 50%, and cut overall import quota levels by 47%. A first reading of the negotiated regulation has been tentatively scheduled for 18-21 May, and sources generally expect the measure to be adopted without issue.

Specific details on the country-specific allocations of the tightened quotas remain unavailable, and are being actively prepared in an associated implementing act. McCloskey understands that the European Commission – and industry representatives – are actively conducting article XXVIII negotiations this week in Geneva, finalising quota allocations for affected trading partners.

The tabled text does give some additional indication of how country-specific quotas will be allocated, confirming the methodology of adjusting specific 2022-2024 import market shares to 2013’s overall import balance of 13%.

Beyond that, the agreed regulation details a number of factors the Commission should be “taking into account” when designating country-specific allocations, including new considerations of:

• “the Union interest” – defined in relation to the entire steel value chain, including final consumers;
• “third country measures impacting the Union steel market”;
• whether countries are “in breach of ILO conventions or multilateral environmental agreements;”
• “information gathered in application of Article 3” – detailing the melt and pour requirements

The draft also clarifies how quotas will be administered as relates to Free Trade Agreement (FTA) partners, confirming that relevant counterparties will still be subject to the new steel trade framework via bilateral safeguard agreements. The Commission is authorised to adopt these implementing acts with immediate legal effect “on duly justified grounds of urgency,” if required to ensure implementation before 1 July.

Where a country receives a quota allocation via bilateral FTA safeguard, they will not receive duplicated quota allocations under the country-specific quota implementing act. If bilateral safeguards cannot be applied to an FTA, said counterparty will remain subject to the quotas set by the primary regulation.

‘Melted and poured’ evidence requirements are included in the agreed draft, but remain a traceability mechanism for now, non-determinative of quota allocations. Mill test certificates are cited as potentially sufficient as “verifiable appropriate evidence” of the country of melt and pour, with further details to come via implementing act before 31 August. By July 2028, the Commission will assess whether the country of melt and pour should become the basis of allocation to country-specific quotas, on the basis of “information collected” in the preceding years.

Most provisions under the new measure, including the overall quota volumes and country-specific allocations implementing act, will take effect from 1 July, just in time to replace the existing steel safeguard system which reaches its maximum 8-year term in June as per WTO rules.

Overall, the agreed text reflects the Commission’s original proposal, with relatively minor changes to CN codes across product categories, but no changes to the overall quota volume of 18.3 million tones, or the specific allocation to product categories.

The most prominent change relates to the administration of the quotas, specifically the quota carry-over, which the Commission originally proposed to remove from the new framework.

Quarterly quota carry-over is now back in the final negotiated text, but only for the initial July 2026-27 year, after which the carry-over will be reviewed specific to each product category, taking into account factors including import pressure and its concentration across the trading year; downstream supply availability; and average quota use over the period, taking quarterly usage above 80% as strong evidence to support maintaining the carry-over.

As regards pressure to extend the measure to steel-containing goods – to avoid simply deflecting non-competitive substitutive import pressures downstream – the Commission has expedited the review processes under the regulation:

For certain product categories, scope extension review has been brought forward to 31 December, with stakeholder consultations to begin before 1 July:

• “Tubes, pipes and hollow profiles, of cast iron” – CN codes 73 030010, 73 030090;
• “Non alloy and other alloy wire” – CN codes 72 29 2000, 72 29 9020, 72 29 9050, 72 29 9090; “Stainless Wire” – CN codes 72 23 0011, 72 23 0019, 72 23 0091, 72 23 0099;
• “Non-Alloy and Other Alloy Forged Bars” – CN codes 7214 1000, 7228 1050, 7228 4010, 7228 4090).

Further downstream scope extensions to products containing “a significant amount of steel” will be assessed by 30 June 2027, but the Commission has not been granted authority to expand the product scope without a new legislative proposal. This is likely to be deemed far too slow a pace by industry associations like EUROMETAL, which recently spearheaded a campaign – with broad support across the European steel value chain – to extend the incoming steel trade measure to all steel-containing products across CN headings 73-95 before implementation 1 July.

The Commission has been granted extensive power to vary quota volumes by product category, in so far as total allocations are not adjusted beyond 14,400,000- 22,200,00 t (from the initial allocation of 18,345,922 t). “Union interest” returns as a central factor for consideration in adjusting quota levels, as well as new provisions relating to the EU steel sector’s “decarbonisation path,” domestic supply diversity and associated cost inflation, security and defense, and demand evolution.

Finally, the agreed text annex contains a joint statement from the EU’s lawmaking institutions on the continuance of steel imports from Russia – a supply route criticised by many in the EU steel market given the existing sanctions regime – suggesting that the new regulation will not modify the existing quota-based sanctions exemption for Russian-origin steel, and citing the existing “transitional agreement” phase-out deadline of September 2028.

The agreed text does explicitly provide that countries under restrictive measures would not be allocated country-specific quotas, confirming that Russia’s historic trade flows with the EU will not be accommodated in the allocation of quota volumes, for as long as sanctions remain.

Author: Benjamin Steven

opisnet.com

The Council of the European Union has detailed its position on the proposed steel trade regulation intended to replace the safeguard measure, Kallanish notes.

This follows an agreement between Council and Parliament earlier in April.

By 31 December 2026, the Commission must assess whether to amend the scope to cover specified products including cast iron tubes, certain wire products and forged bars. By 30 June 2027, it must assess whether to cover additional products made of, or containing, a significant amount of steel, including with priority downstream iron and steel products currently outside the scope.

The total annual quota volume is set at 18,345,922 tonnes, with a 50% out-of-quota duty. Product-category quota allocations are to be based on import shares over the 2022-2024 period.

The Commission would also have powers to amend total quota volumes within a range of 14.4 million tonnes to 22.2 million tonnes, taking into account Union interest and factors including demand, import market shares, developments in overcapacity, the decarbonisation path of the EU steel sector, supply availability and defence policy objectives.

The regime would apply to imports from all third countries, including countries with tariff preferences or free trade agreements, unless bilateral safeguard measures are applied instead. Products originating in Norway, Iceland and Liechtenstein are excluded.

The compromise text maintains the melt-and-pour requirement. Importers of covered products must provide verifiable evidence, such as a mill test certificate, proving the country where the relevant raw steel or iron was first produced in liquid form and subsequently cast into its first solid state. The Commission must adopt implementing rules on the type of evidence required by 31 August 2026.

Within two years of entry into force, the Commission must assess whether it is necessary to designate the country of melt and pour as the basis for benefiting from the tariff quotas provided for in the regulation. Based on that assessment, it may submit a legislative proposal.

Quota administration will remain quarterly. From 1 July 2026 to 30 June 2027, unused quarterly quota volumes will be carried over to the next quarter. From 1 July 2027, the Commission will review the carry-over, taking into account import pressure, average quota use and insufficient availability of supply for downstream steel users.

The first European Parliament reading of the new bill is expected on 18 May. If Parliament adopts the text as detailed by the Council, the latter would approve the Parliament’s position and the act would pass into law.

 

Author: Elina Virchenko

kallanish.com

Spain’s Hydnum Steel (HS)’s “green” steel mill has advanced towards obtaining the status of Project of Singular Interest (PSI), a legal designation that will speed up its development and implementation, Kallanish notes.

HS is building the first facility on the Iberian Peninsula, designed to use fossil-free energy throughout the manufacturing process and to gradually incorporate green hydrogen to substantially reduce CO2 emissions.

The Government of Castilla-La Mancha initially approved the PSI on Wednesday and gave the go-ahead for the public consultation to begin and for the granting of an integrated environmental permit.

“The PSI aims to establish an industrial plant for the production of steel coils using clean energy, so that the carbon footprint of the final product is reduced by 98% compared to that generated by current processes based on the BF-BOF route,” the authority states. The site covers an area of around 209 hectares between Puertollano and the La Nava industrial park.

“The public information includes the studies for the environmental assessment and the impact evaluation, as well as the assets and rights relating to the project, which may vary depending on any agreements that might be reached between the owners of those assets and HS,” the Government of Castilla-La Mancha adds.

Hydnum Steel aims to produce 1.5 million tonnes of flat steel in the first phase of its operations, with a view to reaching 2.7mt in subsequent stages. The project is valued at around €1.55 billion ($1.8 billion). Construction work is scheduled to begin this year.

 

Author: Todor Kirkov

kallanish.com