Renewables

ArcelorMittal Belgium to get EUR 280 million in state aid to decarbonize steelmaking

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Photo: zephylwer0 from Pixabay

Published

June 28, 2023

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Published:

June 28, 2023

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The European Commission has approved Belgium’s EUR 280 million state aid package for ArcelorMittal to decarbonize the steelmaking process at its plant in Ghent. The aid, in the form of a grant and a soft loan, will help ArcelorMittal Belgium to substitute one of the two existing blast furnaces with a direct reduction iron plant and to phase in green hydrogen, according to a press release from the Commission.

Natural gas, initially used in the steelmaking energy mix, will be gradually phased out, and the plant will ultimately be operated using renewable hydrogen, which will only be complemented by low-carbon hydrogen if not enough green hydrogen is available.

The new plant will ultimately be operated using green hydrogen

The new plant is expected to start operating in 2026, producing 2.3 million tons of low-carbon direct reduced iron (DRI) a year. It is expected to avoid the release of more than 50 million tons of CO2.

A new study by think tank Agora Industry shows it is technically feasible for the global steel sector to reach net-zero greenhouse gas emissions by the early 2040s, by investing in technologies such as direct reduced iron, phasing out coal in steel production, kick-starting hydrogen-based steelmaking, and establishing a green iron trade.

Hydrogen-based steelmaking can help steel sector reach net zero in early 2040s

“Our study shows that it is time to remove the ‘hard-to-abate’ label from the steel industry,” said Frank Peter, Director of Agora Industry.

However, Agora also warns that the future of carbon capture and storage (CCS) in combination with coal-based steelmaking is uncertain both in terms of expected emission cuts and its commercialization.

Agora: The future of carbon capture and storage is uncertain

On the other hand, the study finds, bioenergy in combination with CCS (BECCS) could enable the steel industry to reduce emissions by more than 200 million tons a year by 2050.

ArcelorMittal’s project will help end dependence on Russian fossil fuels and speed up the green transition

The European Commission found that the project planned by ArcelorMittal facilitates the development of the production of green steel, while at the same time supporting the objectives of the European Green Deal, the EU Hydrogen Strategy, the Green Deal Industrial Plan, and the REPowerEU Plan, according to the press release.

It is likely to help the European Union end its dependence on Russian fossil fuels and speed up the green transition, the announcement adds.

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