ArcelorMittal plans to monitor various developments in 2025 before reaching a conclusive decision on the feasibility of its decarbonisation investments in Europe, Kallanish learns from a company representative.
These developments include the planned review of the Carbon Border Adjustment Mechanism (CBAM), a forthcoming assessment of EU steel safeguards, and the release of the Steel and Metals Action Plan. Upon completion, these initiatives will establish the parameters ArcelorMittal will use to formulate the business case for decarbonisation investments in Europe.
The steelmaker previously announced its intention to develop lower-emission, hydrogen-ready DRI-EAF facilities to replace multiple blast furnaces within its European operations.
“These projects were premised on a favourable combination of policy, technology and market developments that would facilitate decarbonisation investment … However, European policy, energy and market environments have not moved in a favourable direction. Green hydrogen is evolving very slowly towards being a viable fuel source and natural gas-based DRI production in Europe is not yet competitive as an interim solution,” the firm says.
“Furthermore, there are significant weaknesses in the Carbon Border Adjustment Mechanism (CBAM), trade protection measures need strengthening in response to increasing imports due to China overcapacity, and there is limited willingness among customers to pay premiums for low-carbon emissions steel. Before taking final investment decisions, it is necessary to have full visibility on the policy environment that will ensure higher cost steelmaking can be competitive in Europe without a global carbon price,” it adds.
ArcelorMittal remains committed to achieving net-zero by 2050 but the magnitude of the decarbonisation project requires increased investment, it continues. “We would have liked to move faster, but the reality is the regulatory environment required to support the business case for investments is not yet in place … The Green Deal Industrial Plan and the Steel and Metals Action Plan, and the legislation flowing from them, will be important, as well as regulation to stimulate the demand signal,” comments chief executive Aditya Mittal.
“While we do have customers that want low-carbon steel, those that do and are willing to pay a premium are still very much in the minority,” he adds.
The steelmaker said earlier this week it is suspending decarbonisation investments at its Dunkirk facility in northern France due to the downturn in the global steel industry (see Kallanish passim). According to rumours, the decarbonisation investments at the firm’s Gent plant are also in doubt. However, the firm has not confirmed this.
The company has not disclosed any details regarding the progress of its sustainability investments at Gent or Dunkirk. However, it has shared an update on its decarbonisation investment in Spain, where engineering works are ongoing for the construction of a 1.1 million tonne EAF at its long products facility in Gijón. It also reports significant advancements in its initiatives aimed at boosting production to 1.6mt by 2026 at the flat products facility in Sestao.
Natalia Capra France
