Climate

Our pathway to emissions reductions is built on three areas of action: expanding our electric arc furnace (EAF) steelmaking, strengthening the recycling and raw materials supply chain, and advancing the breakthrough technologies that will further transform iron- and steelmaking.

This transition is not a single step change. We are progressively transforming processes, aligning investment decisions with technology readiness and infrastructure availability. Solutions are implemented if they are economically competitive . More complex or less mature pathways are developed through pilots, partnerships and staged deployment, as costs become competitive, and clean energy infrastructure becomes available and sustainable, supportive policy conditions are introduced.

Expanding electric arc furnace steelmaking

A key pillar of our strategy today is increasing the use of EAFs where affordable, clean energy and recycled or low-carbon metallics are available. EAFs allow us to produce high-quality steel with significantly lower direct emissions, particularly when powered by clean electricity and supplied with recycled or low-carbon metallic inputs.

EAF based production now represents around 26% of our steel output (up from 19% in 2018) and we continue to modernising existing facilities to make them more efficient, more digital and better suited to producing high-grade steels. These improvements also help reduce energy use and improve the carbon footprint of our operations.

One key milestone in this EAF transition is the €1.3 billion investment in our Dunkirk site to build a new electric arc furnace (EAF). Replacing a blast furnace (BF) with an EAF is a significant commitment and investment, and it is the largest we have made in Europe since our company was created in 2006. The 2 million tonne EAF will in due course replace one of the two current blast furnaces, which is anticipated to reduce absolute emissions by approximately 25% at the site. The new EAF has the potential to produce steel with a Scope 1-2 intensity of potentially as low as 0.6 tonnes CO₂e per tonne.

Strengthening recycling and raw materials supply

High quality scrap and metallics are essential for low-carbon steelmaking. To ensure a reliable supply for our growing EAF operations and help us build a resilient, circular and lower-emission materials supply chain:

• We are expanding our recycling capabilities and investing in technologies, when they become economic, that improve the quality and consistency of scrap, including advanced sorting and artificial intelligence.

• We are enhancing our ability to produce and secure the right types of iron ore pellets and other metallic inputs needed for lower-carbon steelmaking processes.

• We are exploring sustainable alternatives to coal, including biocarbon sourced from responsibly managed biomass, to reduce emissions in processes where coal is still required.

Advancing breakthrough technologies

While we take near-term steps, we are also preparing for the next generation of technologies that will enable deep decarbonisation across iron and steelmaking. Our work includes:

• Hydrogen-based iron and steelmaking, including replacing fossil fuels in certain thermal processes.

• Electrolysis technologies that have the potential to produce iron using only electricity.

• Carbon capture, utilisation and storage, with pilot projects designed to help us understand performance, integration and scalability.

Through pilot projects, partnerships and targeted investments, we are building the capabilities needed to deploy these solutions when the energy system and supporting infrastructure are ready.

Clean and renewable energy is a critical enabler of lower-carbon steelmaking.

As more steel production relies on electricity, the carbon footprint of that electricity becomes increasingly important. Access to low-carbon power directly influences the emissions profile of steel and the feasibility of new production technologies.

We view the energy transition not only as a risk to manage, but as a structural change in the industrial landscape. Securing reliable clean energy supports emissions reduction, reduces exposure to energy volatility and enables long-term industrial transformation.

Changes in energy systems are therefore essential to reducing emissions from heavy industry. The transition of steelmaking and the transition of energy systems must progress together.

Investing directly in renewable energy

We have identified the opportunity to invest directly in the new value pools created by the expansion of clean power systems. We are developing a portfolio of high-quality renewable energy assets in regions with good natural resources and enabling conditions. This is an exciting and attractive new area of business for us.

In 2025, our first and largest renewable energy venture had started providing clean electricity to AM/NS India. Developed as a hybrid project, it integrates 1GW of solar and wind capacity with a third party hydro pumped storage solution, to deliver at least 250MW of round-the-clock power. Vast in scale, the solar site is spread over 2,400 acres, equivalent to more than 1,700 FIFA size football fields and with the wind site spread over 700 acres. Now fully commissioned and running at nameplate capacity, its annual power capacity is equivalent to powering nearly 10 million Indian households. This is expected to provide over 20% of the existing energy requirements to AM/NS India’s Hazira plant and to support emissions reductions of 1.5 million tonnes.

With additional projects in Brazil (819MW) and Argentina (130 MW), we now have 1.8GW of renewable capacity commissioned (1.6 GW on an equity share basis). A further 1.5GW is now under development and should be commissioned by 2028, This includes 200MW in Brazil, 180MW in Argentina, and a further 1GW across three projects in India (Maharashtra, Rajasthan and Gujarat).

Steel is not only a sector that must decarbonise. It is also a material that enables decarbonisation across the wider economy.

Renewable energy infrastructure, electrified transport, power grids, efficient buildings and resilient infrastructure all rely on high-performance steel. These systems require materials that combine strength, durability and reliability over long operating lifetimes.

Electrical steels sit at the centre of the role we are playing in enabling the transition. They enable technologies such as electric transport, renewable energy, modern power grids and data infrastructure. As demand for these applications increases, the need for high‑performance electrical steels is rising. To meet this demand, we are significantly expanding our production capacity with a new electrical steel line in Mardyck, to complement our existing European operations. We are also developing a new electrical steels facility in Alabama to supply automotive, renewable energy and industrial motor markets, increasing our ability to meet growing global demand.

In the built environment, steel also supports design approaches that reduce material use, improve energy performance and integrate renewable energy systems. Our approach includes holistic services like Steligence^®, which promotes design that uses materials more efficiently, reduces environmental impact and unlocks value across the life cycle of buildings and infrastructure. By combining materials expertise with design thinking, steel can help reduce emissions across the full lifecycle of buildings and infrastructure.

Our insulated steel solutions improve building energy performance by combining thermal efficiency, structural strength and easy installation. Innovations such as integrated roofing systems—with steel panels, insulation and solar cells in one lightweight module—offer lower carbon footprints and higher energy performance. These advancements show how our products are increasingly aligned with the growing needs of electrification and energy‑efficient construction.