ArcelorMittal Belgium has decided to delay what would have been the largest climate investment in the country’s history, a €2 billion transformation of its Ghent steelworks into a low-carbon production site, according to local media reports.
CEO Frederik Van De Velde announced the decision during a hearing before Belgium’s federal parliament, emphasizing that, although the company remains committed to decarbonization, current market conditions make such an investment financially unfeasible.
“Investing now would result in a negative return, given the current market,” Van De Velde stated, adding, “We are sticking to our plan, but will implement it at the right time.”
Revolutionary transition put on hold
Initially announced in 2021, the project aimed to replace Ghent’s traditional blast furnaces with a direct reduced iron plant and electric arc furnaces. However, the investment’s priority has shifted to ArcelorMittal’s Dunkirk site in France, where lower electricity prices make the project more competitive. Following this, CEO Aditya Mittal decided to pause all major European climate investments.
Market not yet ready for green steel
Van De Velde highlighted that the delay does not signify withdrawal but rather a strategic postponement due to weak demand for low-carbon steel. “Customers today are not willing to pay more for low-carbon steel,” he said. He added that the absence of EU-level obligations on carbon intensity in end products continues to limit demand. Combined with high energy costs, European steelmakers face severe competitive disadvantages against producers in other regions. “Europe cannot expect us to invest billions in decarbonization while paying carbon taxes our competitors don’t,” Van De Velde emphasized.
Public funding linked to project execution
Authorities at the Flemish, federal and EU levels have pledged financial support for the Ghent transformation through mechanisms such as Finocas, but Van De Velde clarified that subsidies will only be used for active, viable projects. “We don’t take subsidies for things we don’t do,” he said. “There has to be a real business case; otherwise, using public aid doesn’t make sense.”
Employment security and outlook
ArcelorMittal currently employs around 5,000 people directly and provides about 30,000 indirect jobs in Belgium. According to Van De Velde, these positions are not at risk despite the delay. “We want to remain present in Belgium and Europe,” Van de Velde stated, adding, “Some support services will be relocated to India, but the impact on Belgian employment will be minimal.”