ArcelorMittal will invest EUR1.3bn in installing replacement electric-arc steelmaking capacities at its Dunkirk plant, scheduled for first operations in 2029, the company announced 10 February.
According to the steelmaker, the new 2 mt electric-arc furnace (EAF) will be capable of producing steel with “three times less CO2 than a blast furnace,” at 0.6t CO2e/t, and will operate on a mixture of scrap, direct-reduced iron/hot-briquetted iron (DRI/HBI), and pig iron. Half of the EUR1.3bn investment will be financed publicly with Energy Efficiency Certificates.
France’s President, Emmanuel Macron, was present for the announcement at the French site, accompanied by company leadership.
“I am delighted we are now able to launch this €1.3 billion investment in Dunkirk, which underscores our Group’s long-term commitment in France,” said CEO Aditya Mittal in a press statement. “I must thank President Macron and the French government who – very early on – understood the challenges the European steel industry was facing.”
Mittal’s comments reference steelmakers’ long-cited issues with the competitiveness of the European steel sector against global pressures, which the European Commission is attempting to remedy with new industrial support policies, and regulatory simplification. Policies initially proposed by the Commission in last year’s Steel and Metals Action Plan – such as new long-term steel trade protections, the implementation of the Carbon Border Adjustment Mechanism (CBAM), and the upcoming Industrial Accelerator Act (IAA) – are intended to better support the ‘investment case’ for industrial decarbonisation, which for European steelmaking, is largely characterized by the transition from blast-furnace to basic-oxygen furnace (BF-BOF), to EAF steelmaking fed by scrap and direct-reduced iron (DRI).
In its press release, ArcelorMittal states that it “appreciates the progress made by the European Commission to better protect the European steel industry,” and “expects [proposed measures] to restore fair and competitive conditions in the European steel market, thus securing a sustainable future for steel production within the European Union.”
ArcelorMittal has suspended the majority of its European decarbonisation projects, citing aforementioned burdens on competitiveness, as illustrated in McCloskey’s recent Global Green Steel Profile. Postponement to the renovations at Dunkirk specifically related to the high cost of gas and hydrogen in Europe, as stated by company leadership in the French Parliament last year.
The steelmaker’s latest announcement on its decarbonisation plan appears reduced from its initial scope, confirming the construction of only a single EAF, as opposed to previous commitments to construct two EAFs, and a 2.5 mt/y DRI plant. The two EAFs were originally scheduled for initial operations in 2027.
Secondary steelmaking sources have suggested that this indicates ArcelorMittal is abandoning its DRI investment plans and will instead import DRI/HBI to facilitate decoupled steelmaking.
McCloskey’s recent coverage of the leaked draft of the EU’s upcoming Industrial Accelerator Act (IAA) indicates that the European Commission is planning to introduce a ‘sliding scale’ into its new green steel definition, represented by a voluntary low-carbon label that gives a better ‘green classification’ the lower the share of constituent scrap. This could give DRI-EAF steel an advantage over the EU’s existing scrap-EAF production in achieving equivalent, or even improved classifications, despite the lower emissions profile of high-percentage scrap-fed steels.
The EU’s independent EAF steelmakers have largely opposed the inclusion of the sliding scale, fearing that it will give integrated steelmakers undue access to secondary steelmakers’ core construction sector demand as low-carbon markets become increasingly (and at times inconsistently) regulated by instruments such as the IAA.
Despite the fact that the thrust of the European Commission’s regulatory efforts in the steel sector are to protect the ‘investment case’ for decarbonisation without undermining industrial resilience, some market sources have argued that the current trajectory of steel policy across CBAM, the new permanent steel quotas, and green steel standardisation are instead facilitating the gradual decoupling of iron and steelmaking on the continent.
These sources allege that integrated steelmakers are lobbying for ‘sliding scale’ based green standards of universal scope in order to consolidate their access to future domestic low-carbon demand, supporting a limited transition to decoupled EAF steelmaking, while simultaneously closing the market to downstream imports but retaining access to low-cost DRI/HBI from abroad. If true, this would threaten to off-shore primary steel production, undermining the Commission’s push for industrial resilience, and potentially stimulating domestic steel price inflation beyond what consuming industries can tolerate.
The French Democratic Confederation of Labour (CFDT) – France’s largest trade union by membership – boycotted Macron’s visit to the Dunkirk site on similar factors, describing the announcement as “political staging.”
“This announcement is a smoke screen and will not suffice; we are very far from the initial plan […] while ArcelorMittal has obtained everything it wanted!” stated the union in an associated press release. “Behind the hollow words and the promises, there are thousands of jobs threatened and eliminated, weakened industrial basins, and shattered lives.”
ArcelorMittal released its full-year 2025 results this week, reporting $3.2bn net income, and foreseeing an improved outlook for European steel prices and demand in 2026.
