“Catalyst is designed to get governments, companies, innovators, and philanthropists to work together to play their unique role in commercializing clean technology fast. We have organised $1.5 billion in private capital with our first anchor partners – including ArcelorMittal – representing some of the world’s largest companies committed to meaningful climate action. I am humbled by this response, but not surprised since each of those companies recognize how a program like this can lead to both short-term impact and long-term scale.”

Bill Gates, Founder, Breakthrough Energy Catalyst 

ArcelorMittal has become an anchor partner in Breakthrough Energy’s Catalyst program, committing to an equity investment of $100 million over the next five years.

Founded by Bill Gates, Breakthrough Energy is committed to scaling the technologies the world needs to reach net-zero emissions by 2050. Breakthrough Energy’s efforts include investment vehicles, philanthropic programs, policy advocacy, and other initiatives, including Catalyst.

Working with stakeholder initiatives to frame the transition to net-zero steelmaking

While policy frameworks determine the rules for the incentives and disincentives that affect business, there are a range of other initiatives, led by both business and civil society organisations, that will impact on other levers in the market – the behaviour of customers, investors and lenders for example – in the form of ratings, standards and benchmarks.

ArcelorMittal understands the importance of these initiatives, and engages with those it believes may have a strategic influence on future market dynamics for the steel industry.

Initiatives to in which we have taken a leading role include:

Numerous initiatives have emerged to tackle the transition to net-zero steelmaking - Climate Action Report 2 (2021)

Working with policymakers to achieve the support necessary to accelerate decarbonisation

We are optimistic about the role policy can play in transitioning the steel industry to net-zero and, over time, creating the market conditions to make low and zero carbon-emissions steel as or more competitive than higher carbon-emissions steel. But we must be clear about the starting point; the market conditions necessary for this transition are not yet in place. Steel is a globally traded commodity and not all regions of the world are moving at the same pace when it comes to the introduction of regulation to address climate change. Ensuring all market participants operate under the same competitive rules is key;  the greater the level of global coordination in developing effective policies, the better progress we will make towards decarbonisation.

The most effective mechanism to transition the steel industry to net-zero would be a suitably ambitious and globally applied carbon price covering every region, country and market. However, there is little probability of that happening in the short to medium term. Instead, we are faced with a situation where each jurisdiction develops its own policy framework with no unified customer and GHG policy response for the steel industry globally. This has created a sub-optimal situation with often complicated and overlapping policy landscapes that do very little to advance the required market conditions to deliver competitive carbon-neutral steel.

ArcelorMittal is committed to conducting all its direct and indirect policy lobbying and advocacy work in line with the Paris agreement. And we will take action to ensure we are not supporting lobbying that is misaligned with the goals of the Paris Agreement, taking into account ArcelorMittal’s level of engagement and level of influence in the industry association. Potential escalation measures include direct communication requesting further alignment with ArcelorMittal policy priorities and the Paris agreement, ensuring ArcelorMittal’s financial contribution is ringfenced for non-lobbying activities (e.g. towards standard setting only), and ceasing our membership.

We do believe, however, there are many policies developed for other industries that can be implemented for the steel industry. One example is contracts-for-difference, which have provided valuable support for the renewables industry for many years. New policies will also need to be developed, such as a carbon border adjustment mechanism that ensures domestic producers and imports share the same CO2e cost on the road to decarbonisation.

We believe that policy instruments need to deliver five market conditions to ensure that low and zero carbon-emissions steelmaking is at least as competitive as higher carbon-emissions steel:

  • Measures to incentivise the transition to low and zero carbon-emissions steelmaking
  • A fair competitive landscape that accounts for the global nature of the steel market, ensuring domestic production, import and exports are subject to equivalent GHG reduction regulations
  • Financial support to innovate and make long-term investments and neutralise the higher operating costs of low and zero carbon-emissions steelmaking
  • Access to sufficient clean energies at affordable price level
  • Incentives to encourage the consumption of low and zero carbon-emissions steel over higher carbon-emissions steel

ArcelorMittal is committed to playing a leading role in decarbonising the steel industry and clearly this means we need to actively and directly engage with policymakers and organisations that advocate for the policies and conditions that will enable steel to achieve its net zero transition.