ArcelorMittal blames EU policy gaps for green plans delay

ArcelorMittal (NYSE: MT), the world’s second-largest steelmaker, is delaying plans for transitioning to low-carbon steel production, blaming insufficient policy clarity and support from the European Union for its decision. The Luxembourg-headquartered firm highlighted this week several challenges in replacing its coal-fired blast furnaces with hydrogen-ready technology, saying that Europe lags in building a robust green hydrogen infrastructure.ArcelorMittal’s transition plan, unveiled in 2020, aimed to implement hydrogen-powered Direct Reduced Iron (DRI) and Electric Arc Furnace (EAF) technologies to cut emissions. The company said this week that further investment was contingent on favourable policy, technological progress and market conditions.ArcelorMittal’s chief executive, Aditya Mittal, acknowledged governmental support but emphasized that further measures are essential. “The scale of the challenge requires further policy initiatives to unlock increased investment,” Mittal said in a statement. He also underscored the need for using natural gas as a transitional fuel until green hydrogen becomes commercially viable.The company pointed to “significant weaknesses” in the EU’s planned carbon border adjustment mechanism, designed to tax imported carbon-intensive goods, and called for stronger trade protections against cheaper Chinese steel imports produced using coal-fired furnaces.ArcelorMittal’s announcement comes amid broader difficulties in Europe’s steel sector. EU steel production has declined by 34 million tonnes over the past five years, with capacity utilization falling to 60%. Imports now account for 27% of the EU market, creating competitive pressures for domestic producers. Global steel overcapacity reached 551 million tonnes in 2023, with the Organization for Economic Co-operation and Development (OECD) predicting an additional 157 million tonnes by 2026.The strain on the sector has been further highlighted by Germany’s Thyssenkrupp Steel, which recently announced plans to cut up to 11,000 jobs, including the closure of its Kreuztal-Eichen processing site in the home country.Thyssenkrupp cited a rise in cheap imports from China for the planned workforce reduction. The company had already announced a review of its plans for the production of green steel.China, the world’s largest steel producer, has been flooding world markets this year with the metal this year, and is on track to export more than 100mn tonnes — its highest export figure since 2016.Calls for actionIn response to these challenges, industry association Eurofer has called on the EU to address trade dynamics, energy costs, and carbon policies to prevent what it described as the “irreversible decline” of Europe’s steel industry.“The clock has already struck midnight,” Eurofer stated, urging swift and robust measures to support the industry while advancing toward the EU’s 2050 carbon neutrality goals.Climate advocacy groups have also weighed in, criticizing ArcelorMittal’s decision to delay its green transition. SteelWatch, a climate-focused organization, suggested that the company’s move reflects deeper issues in its approach to sustainability.“Feasibility has got harder, and current market conditions are tough, but these are not good enough reasons to stall on investment in a future-fit industry,” executive director Caroline Ashley said in Thursday.Ashley further suggested that the delays could be motivated by political and strategic considerations, adding that the company risks signalling that climate action is secondary to other priorities.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com