ArcelorMittal Europe announces today that, regrettably, it cannot  proceed with its previously announced DRI and EAF plans for the decarbonisation of its flat steelmaking sites in Bremen and Eisenhüttenstadt.

ArcelorMittal had already stated in November 2024 that it was unable to take final investment decisions on constructing new DRI-EAF assets in Europe, given that the policy, energy and market environments had not moved in a favourable direction. The company had also said at that time it was evaluating a phased approach to decarbonisation in Europe, starting with the construction of electric arc furnaces. 

As the contract with the Federal government of Germany, for EUR 1.3 billion of financial assistance required construction on the DRI-EAF project to commence by June 2025, ArcelorMittal Germany has been obliged to formally notify the government that it cannot proceed with these investments, given the realities of the market and the economics of low-carbon emissions steelmaking. 

In line with the company’s intention to take a phased approach to its decarbonisation in Europe, the next step in Bremen and Eisenhüttenstadt will focus on detailed planning for the construction of electric arc furnaces, to be ready for a scenario in which there is a strong business case for EAF-based production in these sites.

ArcelorMittal remains committed to continuing to reduce the carbon footprint of its assets, although as announced in April it is increasingly unlikely to achieve its 2030 carbon emissions intensity target.  It is increasingly well documented that there has been slower than expected progress on all aspects of the energy transition, including green hydrogen not yet being a viable fuel source and natural gas-based DRI production not being competitive as an interim solution.  The global economy is not yet achieving the pace of change required to meet the Paris Agreement. Full implementation of existing NDCs by 2030 would only cut emissions by up to 10% from 2019 levels, far short of the 28% needed for 2°C and 42% for 1.5°C.

Meanwhile the European steel market is under unprecedented pressure, with weak demand and high levels of imports.

ArcelorMittal engages regularly with the European Commission and Member States on the urgent priorities required to support the sustainability of steelmaking in Europe and its transition to lower-carbon technologies. This includes the imperative of addressing:

• The high level of imports entering the European market in a market of otherwise weak demand
• The effectiveness of new instruments designed to support the transition of hard to abate sectors including the CBAM
• The price of electricity (switching from a blast furnace to an electric arc furnace means moving from a furnace that predominantly uses coal as its energy source to one using natural gas and electricity)

The first new electric arc furnaces will be in countries that are able to provide visibility and certainty on low-cost electricity, and ArcelorMittal announced in May its intention to build the next EAF in Dunkirk, France.

The current electricity prices in Germany are high compared both internationally and with European neighbours. 

Commenting, Geert van Poelvoorde, CEO ArcelorMittal Europe, said:

“We appreciate the financing offered by the Federal government of Germany and the state of Bremen as well as the support of the state of Brandenburg for this project. But even with the financial support, the business case for moving ahead with this transformation is not strong enough, which shows the scale of the challenge.

“As it stands, the European steel industry is under unprecedented pressure to remain viable and that is without the additional costs required to decarbonize.   The European Commission and Member States are taking steps to address this through the Steel and Metals Action Plan, but it cannot happen quickly enough, and I am concerned that some of the actions may not go far enough to achieve their desired purpose. 

“I have been in the steel industry my entire career and I remain convinced that Europe – and Germany - can maintain a thriving steel industry – but it must act decisively to ensure its words of commitment translate into genuine supportive action.

“The most important priority right now is to ensure that there is a vibrant level of steel demand in Europe that is accessible to European steel producers. The high levels of imports are a major concern – we need imports for flat products to be limited to 15% - which means a reduction of around 50% compared with what we are seeing today.

Once that is achieved, the industry will be in a much stronger position to be able to progress with decarbonization investments.”