Climate FAQ

As stated in our recently published Sustainability Report, ArcelorMittal has made progress in reducing absolute emissions, as well as investing in several initiatives to support the energy transition.

Since 2018, our absolute carbon footprint, on a like-for-like basis (adjusting for portfolio changes), is down by 27%.

Over that same period, our Scope 1 and 2 carbon intensity, which includes mining and steelmaking activities, has improved to 1.79 tCO₂e per tonne of steel (2025), from 1.86 tCO₂e per tonne of steel in 2018. Using the same operational boundary as World Steel Association (WSA), which considers limited upstream Scope 3 emissions, our 2025 steel only intensity was 1.86 tCO2e per tonne of steel, compared with the WSA average of 1.92 tCO2e per tonne of steel.

Drivers of progress for the absolute carbon footprint reduction included lower production, an increasing share of EAF production (26% in 2025 vs 19% in 2018), contributions from operational improvements and early decarbonisation projects – with the latter three areas contributing to our lower carbon intensity.

We have invested significant capital in recent years to support the energy transition, investing in renewable power, advancing our electric arc furnace capacity, expanding our electrical steel offering to support electrification across the economy, and more. As well as supporting the energy transition, these investments are disciplined and value-focused - designed to strengthen our competitiveness and deliver sustainable returns for the company.

Our actions can be broken down into three areas:

Transforming our operations

Aside from operational improvement most of our progress in this area is being driven by investing in electric arc furnaces (EAFs), which make steel with a significantly lower carbon intensity than the blast furnace-basic oxygen furnace route, which accounts for 69.4% of global steel production. In Europe, we are building a new long products EAF in Gijon, Spain that will be commissioned later this year; revamping our two EAFs (1.6mt total capacity) in Sestao, Spain, both of which will be operational by the year end; and earlier this year announced a €1.3bn investment – the largest single investment in our European business – to construct a new 2mt flat products EAF in Dunkirk, France.

Alongside the acceleration of EAF capacity, we are investing in, testing and advancing a wide range of decarbonisation technologies. In Ghent, Belgium, our €200 million Steelanol facility - the first of its kind in the European steel industry - captures carbon-rich gases from the steelmaking process and converts them into advanced ethanol, demonstrating the potential of carbon capture and utilisation at industrial scale. In parallel, we have commissioned a €35 million biomass plant, also in Ghent, which converts waste wood into biochar that can partially replace fossil coal in the blast furnace, reducing emissions while giving new value to waste materials. Taken together with our investments in EAFs, these initiatives reflect both the breadth and scale of our approach in Europe: no other steelmaker is developing EAF capacity at comparable pace, or advancing such a diverse portfolio of decarbonisation technologies, and we continue to lead the market in low-carbon steel through our XCarb® range, produced today at scale.

We have also invested significantly in securing high-grade iron and metallics, notably through the $800mn acquisitions of a HBI facility (a compacted form of direct reduction iron) in Texas, USA and three scrap steel facilities in Europe with annual processing capacity of 1mt.

Renewable energy

Renewable energy is a new and attractive area for ArcelorMittal. We are developing a portfolio of high-quality renewable energy assets in regions with good natural resources and enabling conditions. These renewable assets have guaranteed offtake demand with our steel sites, and the steel facility benefits from access to reliable green renewable energy at an attractive price. At the end of 2025, we had 1.9GW (1.6GW on an equity share basis) of renewable capacity commissioned, with a further 1.4GW (1.2GW on an equity share basis) under development in Argentina, Brazil and India. Our total investment for these projects is $2bn.

Enabling the transition through materials and solutions

We are directing investment towards the production of innovative products that are closely linked to the expansion of low-carbon energy systems and efficient infrastructure.

In particular, we are scaling up production of high-performance electrical steels, which are essential for electrified transport, renewable energy generation, power grids and digital infrastructure. We are doubling our European capacity through a new $500mn electrical steel line in Mardyck, complementing our existing production in Saint Chély d’Apcher. In the United States, we are building a new $1.2bn facility in Calvert, Alabama, with capacity of up to 150,000 tonnes per year, supplying automotive, renewable and industrial applications.

We are also advancing low-carbon construction through integrated solutions that combine high-performance steel products with design expertise across the building life cycle. Our Steligence® approach helps optimise material use, improve energy efficiency and reduce whole-life carbon, while innovations such as insulated steel panels enable strong thermal performance with lower weight and faster installation.

Our total investment in decarbonisation initiatives, EAFs, renewable energy, electrical steels and metallics acquisitions – when all announced projects complete by 2030 – will have been c. $7bn.

Our original 25% target, set in 2021, reflected assumptions about technology maturity, energy prices and supportive policy that have not materialised as expected. For example, green hydrogen costs remain high, CCS deployment is lagging, and enabling infrastructure is limited. Since then, market conditions, electricity costs, and policy signals, particularly in Europe, have shifted considerably.

The revised expectation of “up to 10%” is based solely on projects that have reached final investment decision. This ensures our pathway reflects what is realistically achievable under current economic and technological conditions rather than aspirational modelling.

We have confidence in achieving up to 10% because it is grounded in committed, financed projects already underway, including new announced EAFs and operational improvements.

Exceeding this level by 2030 would require material changes in external conditions, including sustained access to competitively priced low carbon electricity and stronger policy frameworks that reduce competitiveness risks and enable large scale investment. Realistically, given the long development and implementation timelines for industrial decarbonisation projects, it is highly unlikely that additional emissions reductions driven purely by decarbonisation could be delivered within the 2030 timeframe.

Our net-zero 2050 ambition reflects the long-term trajectory and is potentially achievable if technology maturity accelerates and tipping points are reached for the critical inputs, e.g. clean electricity cost and availability. Our near-term target reflects what we can realistically deliver within current policy, market and infrastructure limits.

We remain ambitious, while being transparent about practical constraints and timelines. Maintaining ambition while adjusting expectations ensures transparency and supports investment decisions that are grounded in real-world feasibility rather than assumptions about future technology or regulation.

The final investment decision became possible after several enabling factors aligned, namely:

• A competitive long-term electricity contract with EDF

• The introduction of CBAM and strengthened trade measures

• 50% project cost coverage through France’s Energy Efficiency Certificates (CEE)

• Streamlined permitting under the Industrie Verte framework

• Participation in the Dunkirk low-carbon industrial cluster (ZIBaC), reducing project and infrastructure risks

These conditions – which are not all present elsewhere in Europe and depend on the specific local situation - collectively provided the economic and regulatory certainty needed to proceed and we thank the European Commission and the French government for acknowledging the need to support the European steel market and its decarbonisation journey.

While we continue to see DRI EAF a potential long term pathway for deep decarbonisation, the projects announced in Belgium, France, Germany and Spain were premised on conditions that have not materialised: the availability of green hydrogen at scale, and at a competitive cost. This is not in place today. Green hydrogen remains prohibitively expensive in Europe and is not available in the quantities we require, and the transition phase - where DRI would be operated on natural gas before switching to hydrogen - also faces a structural barrier: gas prices in Europe are significantly higher than in competing regions, typically two to four times those in the United States, undermining the competitiveness of gas based DRI production.

We see this challenge first-hand in Hamburg, where we operate Europe’s only natural gas–based DRI plant. While it provides valuable technical learning, its operation is heavily constrained by energy costs and it cannot be run competitively on a sustained basis. Against this backdrop, we have taken the decision not to progress these DRI EAF projects at this time.

They can play a role in the future, but only when the enabling conditions are in place. In the meantime, our focus is on delivering decarbonisation through investments we can execute today - most notably the sequential rollout of electric arc furnaces - while continuing to advance and test the technologies that will underpin the next phase of the transition.

Taken together, these policy instruments have the potential to reduce import pressure, allow more sustainable asset utilisation rates, better align carbon costs between EU producers and international competitors, and provide a clearer long term framework to support investment in decarbonisation. For example, the steel Tariff Rate Quotas (TRQs) introduced on 1 July are intended to limit low priced imports and reduce the impact of global overcapacity on the EU market, which should help improve capacity utilisation at domestic steel mills.

At the same time, the current trajectory of the EU Emissions Trading System (ETS), including the progressive phase out of free allowances and the tightening benchmarks, will increase near term carbon costs for energy intensive industries. This will place additional pressure on competitiveness before low carbon steelmaking technologies are economically viable at scale.

We are therefore advocating for a more balanced and coherent policy pathway, one that maintains ambitious climate objectives while ensuring that European industry can remain competitive and continue to invest in decarbonisation over the long term.

ArcelorMittal is engaging constructively with member states, the European Commission, and the European Parliament for a reformed ETS that works for hard-to-abate, energy-intensive industry and the whole manufacturing chain in Europe, supporting decarbonisation but at a cost that is not overly burdensome and does not further erode the competitiveness of European manufacturing, including downstream industries.

The formal review of the ETS is expected to start with the publication of the Commission proposal on 17 July 2026. In anticipation, a very active, EU wide policy debate is already underway, with many companies and sectors active in sharing their views.

The EU has recently reaffirmed its long term climate ambition, including the 2040 climate target (a 90% net reduction in greenhouse gases, compared with 1990), while also recognising the growing challenges to industrial competitiveness arising from high energy and carbon costs.

Within this context, two elements of the ETS are clearly under focus, in addition to the periodic setting of benchmarks:

• The pace of the phase out of free allowances, currently scheduled to conclude by 2034

• The ETS cap, which under existing legislation reduces to zero by 2039, leaving no allowances available, whether free or auctioned.

ArcelorMittal supports revisiting these trajectories, as our Executive Chairman discussed in a recent article published in the Financial Times.

We explain the complete picture in the question below which demonstrates the claims of being allocated a level of allowances that exceed our emissions are categorically not true. Since the start of phase 3 of the ETS in 2013, there has been a negative balance of EUAs across the European steel industry every year, apart from 2020 and 2023, when production was significantly lower due to Covid and a market crisis, respectively. This resulted in a small (less than 5%) surplus of allowances for these two years, while the overall balance for European steelmakers, including ArcelorMittal, from 2013 to 2025 was negative.

ArcelorMittal, like other integrated steel producers in Europe, transfers a portion of its allocated EU ETS allowances to power generators under so-called tolling agreements. These agreements relate to the transfer of steelmaking waste gases, which are used by power plants to generate electricity. While the free allowances remain recorded in the EU Registry as having been allocated to ArcelorMittal, an equivalent number of allowances must ultimately be transferred to the power plant operator to cover the CO₂ emissions resulting from the combustion of those waste gases. Those emissions are reported by the power plant, not by ArcelorMittal's steelmaking installations. As a result, comparing ArcelorMittal's allocated allowances solely with its verified emissions can be misleading, as it does not take into account allowances that must be passed on to cover emissions arising from the use of steelmaking waste gases in power generation. This results in the misinterpretation that ArcelorMittal has a surplus of allowances.

Between 2021 and 2025 (the first sub-period of Phase 4 of the ETS), across our European business, our total verified CO₂ emissions amounted to 170,075,530 tonnes, against allocated allowances of 212,809,169 tonnes. However, as explained in the question above, we transferred 72,056,762 tonnes of these allocated allowances to power plants, meaning the actual level of allocated allowances available to our European business was 140,752,407 tonnes – a shortfall of 29,323,123 tonnes or 17.2%, against our total verified CO₂ emissions.

Over this period, EU carbon prices rose significantly as the ETS tightened, with allowances typically trading in a broad range of roughly €50 to €90 per tonne. Therefore, the cost of covering this shortfall ran into billions of euros - a material and growing cost burden for our European steel business and one that is not borne by steelmakers out of the EU.

The situation is becoming more challenging as we move into the second sub-period of Phase 4 from 2026. Under current plans, allocated allowances are now being reduced year by year on the path to full phase-out by 2034, while benchmarks (which are based on the emissions of the top 10% most efficient installations) continue to tighten, meaning producers receive fewer allowances per tonne even if their performance remains unchanged.

At the same time, carbon prices remain elevated and volatile. In 2026 so far, EUAs have generally traded in the range of around €60 to €95 per tonne, with market averages around the mid €70s. This means that, even before further reductions in free allocation, the cost of compliance remains high - and will increase structurally as more emissions need to be covered by purchased allowances.

Taken together, this points to a clear trend - carbon costs for European steelmakers are set to rise materially from 2026 onwards, becoming increasingly onerous as free allowances are withdrawn entirely by 2034.

Assuming no free CO₂ allowances and a carbon price of €150 a tonne, we calculate the cost of steel made in the EU will increase by about 50% as a direct result of the additional CO₂ costs imposed by the ETS.