Luxembourg-headquartered steelmaker ArcelorMittal has canceled planned decarbonization projects in Germany, citing challenging market conditions and regulatory obstacles.
The company notified the German government that it cannot proceed with direct reduced iron and electric arc furnace projects in Bremen and Eisenhüttenstadt. The cancellation follows the company's failure to meet a June 2025 construction deadline required for €1.3 billion in financial assistance. High electricity prices in Germany compared to international competitors were cited as a key factor. According to producer’s statement, in line with the company’s intention to take a phased approach to its decarbonisation in Europe, the next step in Bremen and Eisenhüttenstadt will focus on detailed planning for the construction of electric arc furnaces, to be ready for a scenario in which there is a strong business case for EAF-based production in these sites.
The decisions reflect broader challenges facing the European steel industry, including weak demand and high import levels. ArcelorMittal acknowledged that it is increasingly unlikely to achieve its 2030 carbon emissions intensity target, pointing to delays in green hydrogen development and weak competition power of natural gas-based DRI production.
“As it stands, the European steel industry is under unprecedented pressure to remain viable and that is without the additional costs required to decarbonize. The European Commission and Member States are taking steps to address this through the Steel and Metals Action Plan, but it cannot happen quickly enough, and I am concerned that some of the actions may not go far enough to achieve their desired purpose”, stated Geert van Poelvoorde, CEO of ArcelorMittal Europe.
Possible closure of Steelanol plant in Belgium
ArcelorMittal is also considering shutting down its pioneering Steelanol plant in Ghent, Belgium, which is converting carbon from blast furnace gases into ethanol through fermentation technology, with an investment of €215 million. At full capacity, it can produce 60,000 mt of ethanol annually to be used as chemical feedstock or fuel while eliminating 120,000 mt of carbon emissions. ArcelorMittal Belgium CEO Frederik Van de Velde stated that the company has given itself about a year to decide on closure, relaying that even achieving full production targets would not make the project economically viable under current EU regulations.
"The European Commission is fixated on hydrogen as the sole route to climate neutrality," Van de Velde said, arguing that operational carbon-saving technologies like Steelanol are being overlooked despite delivering immediate emissions reductions. Steelanol was intended to serve as a pilot site for wider implementation across the company’s steelworks. However, the ethanol produced is not currently recognized under EU rules as either an ‘advanced biofuel’ or a ‘recycled fuel’, meaning the emissions it avoids cannot be deducted from ArcelorMittal’s carbon balance.
