ArcelorMittal Belgium’s Steelanol carbon capture and utilisation (CCU) project currently lacks economic viability, chief executive Frederik Van De Velde reiterated during a hearing earlier this week in the Belgian federal parliament.
Earlier this year, ArcelorMittal warned the Steelanol plant, which converts carbon monoxide from blast furnace gases at ArcelorMittal Gent into ethanol, may be shut down as it is unprofitable in current conditions (see Kallanish 23 June).
The electrification of the Gent plant is being postponed, as current small sales volumes of low-emission steel do not justify the investment (see separate article).
Last year, the Steelanol facility, with a capacity to produce 80 million litres of ethanol annually, increased production to a level that allowed large-scale shipping via barge. However, Van De Velde pointed out that the European legislative framework for ethanol production remains inadequate for the adoption of this new fuel type.
By 2030, fuels will be required to be of non-biological origin, adding further uncertainty. There is significant regulatory ambiguity regarding future fuel prices, production methods for next-generation fuels, the evolution of CO2 costs, and the future functioning of the EU Emissions Trading System (ETS). Moreover, there is still no clear framework for developing a green steel market, which is essential for the long-term investments needed for decarbonisation, he added.
Assuming a constant CO2 cost of €80/tonne, ArcelorMittal Belgium estimates its cumulative CO2 costs will amount to approximately €4.75 billion between 2025 and 2034, Van De Velde said. The company has called on the government to reinvest part of the CO2 tax revenues into industrial decarbonisation projects. “If we are only taxed, it will be difficult to remain competitive,” Van De Velde warned during the hearing.
He drew attention to the current global overcapacity in the steel industry, which has caused the company to lose market share. Due to a sharp decline in domestic steel consumption in China, total Chinese steel exports have risen significantly, including higher volumes directed towards Europe. This surge has resulted in global overcapacity spilling into the European market. Between 2012 and 2024, Europe shifted from being a net exporter to a substantial net importer, with finished steel imports increasing from around 15 million tonnes to approximately 30mt.
“As import market share doubled in 12 years time, capacity utilisation for flat steel went down to unviable levels … A viable domestic capacity utilisation is core to ensuring the green transition, economic resilience and security,” Van De Velde noted.
Europe’s new trade instruments will revert import market share to a viable level, a necessary condition for investment, profitability, and sustainability.
“Every loophole in CBAM weakens investment in green steel and makes European producers less competitive, at the risk of losing the future of Europe’s green steel,” Van De Velde added.
Citing worldsteel figures, the steelmaker expects that Chinese domestic steel consumption will decline to 860 million tonnes in 2026, a 1% drop year-on-year. In the EU plus UK, the company expects an increase in steel consumption of 3.5% to over 141mt.
Natalia Capra France
