ArcelorMittal said Nov. 26 it has delayed a final investment decision on a 2.3 million mt/year hydrogen-fed direct reduced iron plant at its Gijon cluster in Spain, citing unfavorable political, market and energy market developments, and a slow evolution of green hydrogen.
“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,” the company said.
The statement comes a day after a spokesperson told S&P Global Commodity Insights the company was awaiting guidance from the EU before making final investment decisions on decarbonizing its assets in Europe.
ArcelorMittal did not say when a final investment decision might be taken on the Spanish plant and cited “important deficiencies” in the European Carbon Border Adjustment Mechanism as a main factor, but also noted the absence of a clear domestic framework for green hydrogen as well as slow development of the technology.
“We would have liked to advance quicker, but the reality is that no regulatory framework has been drawn up that would support an economic decision for the investments,” ArcelorMittal CEO Aditya Mittal said in the statement.
Spain’s government in April approved funding from Spain’s Recovery and Resilience funds of Eur450 million ($500 million) for ArcelorMittal’s low carbon steel project at Gijon, which includes an integrated plan for the cluster of four plants.
Overall investment at Gijon was slated at around Eur1 billion, with the bulk earmarked for the DRI unit, which would replace one of the existing blast furnaces and feed a new electric arc furnace, overall reducing the plant’s CO2 emissions by 50%, or 4.8 million mt, over five years.
The DRI would also feed the company’s other EAF at Sestao, for a further 1.6 million mt/year of low carbon steel production.
ArcelorMittal said it would continue with engineering work and analysis, while construction of new EAFs at both sites would not be impacted.
The company said it might expect more clarity on regulation during 2025, citing a Spanish “industrial Green Pact” and an “Action Plan for the Steel and Metallurgic Sector,” among other measures to boost demand.
“While we have clients who want to use low emission steel, only a minority are prepared to buy an additional cost for it,” it said.
ArcelorMittal said its XCarb steel could see sales volume nearly double in 2024 to 400,000 mt.
Platts, part of Commodity Insights, assessed domestic HRC prices in southern Europe at Eur555.71/mt ex-works Italy on Nov. 25, down 19% since the start of 2024.
