The second world steelmaker, ArcelorMittal, struggling with a historic steel crisis in Europe, announced on Thursday June 19, that he was giving up an important investment in the decarbonation of his sites in Germany, invoking “Lack of profitability” Steel production with low emission of CO2.
The group “Unfortunately cannot follow up on his projects to decarbonize his factories” de Bremen (North) and Eisenhüttenstadt (East), specifies a press release from the Steelist, which stops a transformation plan estimated at 2.5 billion euros, including 1.3 billion euros in public aid.
At the end of 2024, ArcelorMittal declared to reassess his investment plans in decarbonation in Europe, demanding more measures to protect European competition steel, especially Chinese. The steelmaker also announced this year an savings plan in Europe, including more than 600 positions of posts in France, in Dunkirk, in the heart of a political showdown.
A profitability and energy transition challenge
The project to transform the two German sites, supported by the State, was part of the attempt to save this traditional industry, which is today threatened in the first European economy. The two sites of Bremen and Eisenhüttenstadt had to have electric ovens and direct reduction units of iron with gas or hydrogen (without coal), the first step to produce decarbon steel.
“Even with this financial support [public]the profitability of this transition is not sufficient, which shows the extent of the challenge to be met ”observes Geert Van Poelvoorde, CEO of ArcelorMittal Europe, quoted in the press release.
Moreover, “The current electricity prices in Germany are high, both in international comparison and with neighboring European countries”underlines the group, pointing out a problem whose new government has made a priority to try to relaunch economic activity.
ArcelorMittal says “Maintain its goal of further improving the carbon footprint of its facilities”but he becomes “More and more unlikely to achieve the objectives of reducing CO emissions2 by 2030 “while “Green hydrogen is not yet a viable source of energy” and that the direct reduction process of iron from natural gas “Is not competitive as a transitional solution”.
European steel is caught in the vice between the drop in consumption on the old continent, the competition deemed unfair of low -cost products from China in particular, the prices of high energy in Europe and, now, the new customs taxes.
Another European steel giant, the German Thyssenkrupp announced at the end of 2024 its intention to suppress 11,000 jobs in the country.
Source: Lemonde