Luxembourg-headquartered steel giant ArcelorMittal has temporarily postponed its investments in the decarbonization of its operations in France, due to the EU’s uncertain policies, according to a report by Reuters.
The company has not reached a final conclusion as to whether it will replace two out of three blast furnaces at its Dunkirk plant with green hydrogen-based facilities. As SteelOrbis reported previously, the French government had approved government support worth €850 million for ArcelorMittal’s €1.7 billion decarbonization program at its Dunkirk and Fos-sur-Mer sites by 2030.
“We are operating in a difficult market, and there are a number of policy uncertainties that are impacting the industry. We need an effective carbon border adjustment mechanism, as well as more robust trade defense measures, to strengthen the business case,” the statement made by the company to Reuters read.
In the meantime, ArcelorMittal has stated in its official statement that the regulatory, energy and market environments in Europe have not evolved in a favorable way and that green hydrogen is very slow to become a viable alternative, while natural gas-based direct reduction iron (DRI) production is yet to be a competitive solution. Also, customers are unwilling to pay a premium for low-carbon steel.
As a result, the company would like to see clarity in regulations which will make sure that steel production technologies with higher costs will be competitive. Additionally, it is awaiting a revised version of the CBAM, a review of steel safeguard measures and the publication of the European Commission’s Steel and Basic Metals Action Plan in 2025. These will determine the competitiveness of investments in decarbonization. Until then, the steelmaker will continue its decarbonization journey step-by-step, starting with the construction of electric furnaces to reduce its emissions.
