Despite securing billions in subsidies, the steel giant finds no business case for hydrogen-based green steel currently, attributing this to insufficient policy and market support.

ArcelorMittal, a leading global steel manufacturer, has announced a significant adjustment in its decarbonization approach, prioritizing electric arc furnaces (EAFs) and smaller scale emissions reductions over its previously planned large-scale hydrogen DRI projects. This shift was disclosed in the company’s Q4 2024 financial results, highlighting a strategic pivot to ensure competitiveness and appropriate returns on investments.

The Luxembourg-based company has reported that the expected progression of its major decarbonization projects, particularly those involving hydrogen-based technologies for green steel production, has not met initial expectations. This has been primarily attributed to inadequate policy frameworks and market dynamics.

ArcelorMittal's current investments are concentrating on expanding its EAF capabilities at its facilities in Gijón and Sestao, Spain. These installations are part of its broader strategy to enhance the production of XCarb, its low-carbon emissions steel brand.

The firm has notably been awarded substantial subsidies, including €1.3 billion from Germany, €850 million from France, €460 million from Spain, €280 million from Belgium, and C$900 million from the Canadian government. However, these funds have been deemed insufficient to offset the high capital and operational expenditures involved in establishing hydrogen-ready DRI facilities.

Further complicating the situation, ArcelorMittal has also encountered delays in the final investment decisions (FIDs) on these green steel projects, citing a lack of a viable business case under the current conditions. Despite these challenges, the company remains committed to its long-term goal of achieving net-zero emissions by 2050.

As part of its revised strategy, ArcelorMittal is continuing engineering work and exploring a phased approach to its decarbonization efforts, starting with the construction of EAFs that can utilize scrap steel to significantly reduce emissions.

https://corporate.arcelormittal.com/

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