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Released June 30, 2025 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--ArcelorMittal (Luxembourg, Luxembourg) has pulled the plug on two major green steel projects in Germany worth more than US$1.2 billion in investment.
It will no longer proceed with direct-reduced iron (DRI) and electric arc furnace (EAF) decarbonisation projects at its steelmaking plants in Bremen and Eisenhuttenstadt. It first announced the projects in 2021, stating it was in support of Germany's planned expansion of the country's hydrogen infrastructure. At the time, ArcelorMittal, which was operating Europe's only DRI-EAF plant in Hamburg, Germany, stated that using green hydrogen would allow up to 3.5 million tonnes of steel to be produced at both sites by 2030, with significantly lower CO2 emissions.
The German government had promised 1.3 billion euro (US$1.5 billion) in funding for the projects as long as construction started this month. However, the company has informed the government that it will not be moving forward, "due to the market situation and the lack of economic viability of CO2-reduced steel production." It also claimed that current electricity prices in Germany are too high "both by international standards and compared to neighboring European countries."
Geert Van Poelvoorde, chief executive officer of ArcelorMittal Europe, commented: "We appreciate the funding from the German government and the state of Bremen, as well as the support from the state of Brandenburg, for this project. But even with the financial support, the economic viability of this transition is not sufficiently ensured, which highlights the scale of the challenge. The European steel industry is currently under unprecedented pressure to maintain its competitiveness - even without the additional costs required for decarbonization. The European Commission and its Member States are taking steps to address this problem with the Steel and Metals Action Plan. But it is moving too slowly -- and I fear that some of the measures do not go far enough to achieve the desired goal."
He added: "The highest priority right now is to revive steel demand in Europe in such a way that European manufacturers can also participate. High imports are a major problem - we need a 15% cap on flat products imports, which represents a reduction of about 50% compared to current levels. Once this is achieved, the industry will also be in a much better position to drive investments in decarbonization."
Last month, the company reaffirmed its commitment to building a 1.2 billion-euro (US$1.4 billion) EAF at its Dunkirk site in France, citing cheaper energy costs and strong financial support from the French government and the European Commission's Steel and Metal Action Plan, launched in March 2025. In January, Industrial Info reported on the dire situation of Europe's steel sector. The European Steel Association, Eurofer, called on the European Union (EU) for urgent action to help protect it from cheap exports and rising electricity costs. The steel sector supports 300,000 direct jobs and 2.3 million indirect jobs. For additional information, see January 2, 2025, article - Europe's Steel Sector Demands Urgent Action.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
It will no longer proceed with direct-reduced iron (DRI) and electric arc furnace (EAF) decarbonisation projects at its steelmaking plants in Bremen and Eisenhuttenstadt. It first announced the projects in 2021, stating it was in support of Germany's planned expansion of the country's hydrogen infrastructure. At the time, ArcelorMittal, which was operating Europe's only DRI-EAF plant in Hamburg, Germany, stated that using green hydrogen would allow up to 3.5 million tonnes of steel to be produced at both sites by 2030, with significantly lower CO2 emissions.
The German government had promised 1.3 billion euro (US$1.5 billion) in funding for the projects as long as construction started this month. However, the company has informed the government that it will not be moving forward, "due to the market situation and the lack of economic viability of CO2-reduced steel production." It also claimed that current electricity prices in Germany are too high "both by international standards and compared to neighboring European countries."
Geert Van Poelvoorde, chief executive officer of ArcelorMittal Europe, commented: "We appreciate the funding from the German government and the state of Bremen, as well as the support from the state of Brandenburg, for this project. But even with the financial support, the economic viability of this transition is not sufficiently ensured, which highlights the scale of the challenge. The European steel industry is currently under unprecedented pressure to maintain its competitiveness - even without the additional costs required for decarbonization. The European Commission and its Member States are taking steps to address this problem with the Steel and Metals Action Plan. But it is moving too slowly -- and I fear that some of the measures do not go far enough to achieve the desired goal."
He added: "The highest priority right now is to revive steel demand in Europe in such a way that European manufacturers can also participate. High imports are a major problem - we need a 15% cap on flat products imports, which represents a reduction of about 50% compared to current levels. Once this is achieved, the industry will also be in a much better position to drive investments in decarbonization."
Last month, the company reaffirmed its commitment to building a 1.2 billion-euro (US$1.4 billion) EAF at its Dunkirk site in France, citing cheaper energy costs and strong financial support from the French government and the European Commission's Steel and Metal Action Plan, launched in March 2025. In January, Industrial Info reported on the dire situation of Europe's steel sector. The European Steel Association, Eurofer, called on the European Union (EU) for urgent action to help protect it from cheap exports and rising electricity costs. The steel sector supports 300,000 direct jobs and 2.3 million indirect jobs. For additional information, see January 2, 2025, article - Europe's Steel Sector Demands Urgent Action.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
