ArcelorMittal’s plan was to replace several blast furnaces across its operations in Europe, with “hydrogen ready” DRI-EAF facilities.
The host countries offered funding support for these projects, with the approval of the European Commission.
The company’s decarbonization plan would be driven by natural gas until green hydrogen became competitive.
ArcelorMittal said due to unfavorable European policy, energy and market environments, 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.
This has resulted in significant weaknesses in the carbon border adjustment mechanism (CBAM).
The company said it continues with its engineering work, as well as analyzing a phased approach that would first start with constructing electric arc furnaces, which can also be fed with scrap steel to significantly reduce emissions.
Aditya Mittal, Chief Executive of ArcelorMittal, said this week “ArcelorMittal remains absolutely committed to decarbonization. It is the right thing to do, both for the company and the planet. I remain confident that we can still achieve our net-zero by 2050 target, but the shape of how we will achieve this, could differ from what was previously announced.
We have been very grateful for the support offered to date by different governments to help accelerate this process. But the scale of the challenge requires further policy initiatives to unlock increased investment. 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.”
Mittal also said he hopes to see new policies coming into play that will support an accelerated transition. 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.
“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.”
In May, ArcelorMittal commenced construction on a 1.1 million tonne EAF at long products plant in Gijón, Spain.
Upon completion, the plant will reduce emissions by 1 million tonnes of CO2e.
In addition, the plant in Sestao, Spain, will increase production to 1.6 million tonnes by 2026. Once complete, much of this production will be our XCarb® recycled and renewably produced low-carbon emissions steel.