European Commission has given the green light to a €850 million measure to support ArcelorMittal France (‘ArcelorMittal’) in its endeavor to partially decarbonize its steel production processes.
The approved project aligns with the EU Hydrogen Strategy, the European Green Deal, and the Green Deal Industrial Plan targets, aiming to reduce greenhouse gas emissions and end reliance on Russian fossil fuels. This ambitious initiative represents a crucial milestone in the journey towards achieving the objectives outlined in the REPowerEU Plan.
France presented the €850 million measure to the European Commission, designed to support ArcelorMittal’s project in Dunkirk, where the company currently operates three blast furnaces and three basic oxygen furnaces that play a crucial role in producing liquid hot metal and converting it into liquid steel.
The approved aid will facilitate the construction of a direct reduction plant (DRP) and two electric arc furnaces (EAF). By integrating these cutting-edge installations, ArcelorMittal aims to replace two of the existing blast furnaces and two basic oxygen furnaces. The shift away from traditional processes will involve a gradual phasing out of natural gas, with the ultimate goal of exclusively utilizing renewable or low-carbon hydrogen, biogas, and electricity for energy inputs.
Reducing Carbon Footprint and Enhancing Sustainability
The impact of this groundbreaking project is far-reaching, as it is expected to produce 4 million tonnes of low-carbon liquid steel annually once the combined DRP/EAF installation commences operations in 2026. Over its 15-year lifetime, the project is projected to save approximately 70 million tonnes of carbon dioxide emissions.
To facilitate knowledge-sharing and further advancements in decarbonization, ArcelorMittal has committed to actively collaborating with industry and academia, ensuring that the expertise and technical insights gained from the project benefit the wider community.
The European Commission meticulously assessed the measure under EU State aid rules, particularly Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU), which permits Member States to support specific economic activities under specific conditions. The assessment was carried out in accordance with the Guidelines on State aid for climate, environmental protection, and energy 2022 (CEEAG).
ArcelorMittal’s project was selected by France as part of an open call in 2020 to participate in an Important Project of Common European Interest (IPCEI) focused on hydrogen. This IPCEI intends to drive down greenhouse gas emissions in energy-intensive industries, and as a project aimed at reducing emissions, it aligns with the CEEAG guidelines, making it well-suited for evaluation under this framework.
The approved €850 million measure is a testament to the European Commission’s commitment to fostering sustainable economic activities and accelerating the green transition. By supporting ArcelorMittal’s groundbreaking efforts to decarbonize its steel production processes, Europe moves closer to its ambitious climate goals and solidifies its position as a global leader in combating climate change. This transformative project sets a remarkable precedent for the steel industry and lays the foundation for a more sustainable and resilient future.