ArcelorMittal, a major steel producer, has announced a pause on its steel decarbonization investments in Europe, citing unfavorable policy, energy, and market conditions. The company had planned to replace several blast furnaces with “hydrogen-ready” DRI-EAF facilities as part of its emissions reduction strategy, supported by host countries and approved by the European Commission.
These projects depended on favorable developments in policy, technology, and market dynamics to offset the high costs of transitioning to low-carbon steel production. However, progress in key areas, including the competitiveness of green hydrogen and natural gas-based DRI, has been slow. ArcelorMittal also highlighted weaknesses in the EU’s Carbon Border Adjustment Mechanism (CBAM), insufficient trade protection against rising imports from China, and limited customer willingness to pay premiums for low-carbon steel.
Final investment decisions will now wait for clarity from upcoming policy reviews in 2025, including updates to the CBAM, steel safeguards, and the EU’s Steel and Metals Action Plan.
In the meantime, ArcelorMittal will focus on engineering work and a phased approach, starting with electric arc furnaces (EAFs). The company has already begun construction of a 1.1-mln-ton EAF at its Gijon plant in Spain and is upgrading its Sestao facility to produce 1.6 mln tons of low-carbon XCarb steel by 2026.
Despite delays, ArcelorMittal remains committed to its 2050 net-zero target. Longer-term plans include exploring technologies like carbon capture, utilization, and storage (CCUS), though meaningful impacts are expected only after 2030. CEO Aditya Mittal reaffirmed the company’s dedication to decarbonization, emphasizing the need for stronger policy initiatives to unlock investment.
“We remain confident in achieving net-zero by 2050, though the approach may evolve,” Mittal said, adding that 2025 policy decisions will shape the path forward.