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Released September 06, 2021 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Steelmaker ArcelorMittal (NYSE:MT) has set aside US$10 billion to cut its carbon emissions by a quarter by 2030.
The company is also investing heavily to transform its Spanish steel plant at Sestao into the world's first zero carbon-emissions steel plant by 2025. Industrial Info is tracking four key projects at the plant worth almost US$1 billion. The company said it expects to deploy approximately 35% of its US$10 billion war chest by 2025 with the remainder in the second half of this decade. It has also increased its European 2030 carbon emissions intensity reduction target to 35% from the 30% previously announced.
The company claimed that in the long run, through the deployment of new technologies, low-carbon steel-making technologies will become more competitive than higher-carbon steel-making technologies. However, it expects that government support of up to 50% will be vital to achieve the shift. It estimates that the cost of green hydrogen will become increasingly competitive over the next decade "but will still require government support." It also expects a much greater role for carbon capture, utilisation and storage (CCUS) infrastructure, which "will take time to be built at scale." Europe will take the lead, but it believes that CCUS infrastructure "has the potential to expand quickly in the U.S. and Canada--providing some potential upside to our assumptions".
In its key European projects, the company's stated goal is to reduce emissions in Spain by 50% by constructing a 2.3 million-tonne hydrogen-powered Direct Reduced Iron (DRI) unit at Gijon, as well as a new hybrid electric arc furnace (EAF). The construction of these units will transition the Gijon plant away from blast furnace-basic oxygen Furnace (BF-BOF) steelmaking to (DRI-EAF) production. It expects that 1 million tonnes of DRI will be transported by rail from Gijon to Sestao to be used as feedstock for its two EAFs. Sestao will also change its metallic input, power all steelmaking assets with renewable electricity, introduce new emerging technologies that will replace the remaining use of fossil fuels in the steelmaking process with carbon-neutral energy inputs.
Earlier this year Industrial Info reported on the company's plans to build a large-scale industrial plant for the direct reduction of iron ore and electric arc furnace-based steelmaking at its site in Bremen, as well as a DRI pilot plant in addition to an EAF in Eisenhüttenstadt. The company said the investment is in support of Germany's planned expansion of the country's hydrogen infrastructure. ArcelorMittal already operates Europe's only DRI-EAF plant in Hamburg, Germany, where the switch to using hydrogen instead of natural gas in the iron ore reduction process is being prepared. For additional information, see August, 2021, article--ArcelorMittal Reveals 'Green Steel' Plans for Two German Plants.
Aditya Mittal, chief executive officer of ArcelorMittal, said: "We have for the first time published a group target for 2030, alongside a more ambitious target for our European business. These targets we believe are aligned with our net zero 2050 ambition and we have also announced today a new collaboration with the Science Based Target initiative. These targets reflect the uneven pace of change that is the reality of the world's decarbonization journey. In regions of the world like Europe, where we are observing an 'Accelerate' policy scenario, we can be more ambitious -- with plans to reduce emissions by 35% within the next decade. In other markets we face a situation where being a first mover will result in us being uncompetitive in that market. For our target setting today we assume progress in other regions of the world will be at least five years behind Europe."
He added: "In Europe our strategy is largely focused on the Innovative DRI pathway. This reflects the commitment in Europe to prioritize the availability of green hydrogen at competitive prices. Spain's plan to accelerate the availability of renewable energy and green hydrogen underpins our recent announcement that ArcelorMittal Sestao will become the world's first full-scale zero carbon-emissions steel plant. In many respects the challenges confronting steelmaking today resemble those faced by renewable energy over a decade ago. The importance of solar and wind was widely acknowledged yet the technology remained economically prohibitive. Targeted, reliable and thoughtful policies supported innovation and investment that enabled both companies and their financing partners to make long-term planning decisions. We are optimistic that the same will happen in steel."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The company is also investing heavily to transform its Spanish steel plant at Sestao into the world's first zero carbon-emissions steel plant by 2025. Industrial Info is tracking four key projects at the plant worth almost US$1 billion. The company said it expects to deploy approximately 35% of its US$10 billion war chest by 2025 with the remainder in the second half of this decade. It has also increased its European 2030 carbon emissions intensity reduction target to 35% from the 30% previously announced.
The company claimed that in the long run, through the deployment of new technologies, low-carbon steel-making technologies will become more competitive than higher-carbon steel-making technologies. However, it expects that government support of up to 50% will be vital to achieve the shift. It estimates that the cost of green hydrogen will become increasingly competitive over the next decade "but will still require government support." It also expects a much greater role for carbon capture, utilisation and storage (CCUS) infrastructure, which "will take time to be built at scale." Europe will take the lead, but it believes that CCUS infrastructure "has the potential to expand quickly in the U.S. and Canada--providing some potential upside to our assumptions".
In its key European projects, the company's stated goal is to reduce emissions in Spain by 50% by constructing a 2.3 million-tonne hydrogen-powered Direct Reduced Iron (DRI) unit at Gijon, as well as a new hybrid electric arc furnace (EAF). The construction of these units will transition the Gijon plant away from blast furnace-basic oxygen Furnace (BF-BOF) steelmaking to (DRI-EAF) production. It expects that 1 million tonnes of DRI will be transported by rail from Gijon to Sestao to be used as feedstock for its two EAFs. Sestao will also change its metallic input, power all steelmaking assets with renewable electricity, introduce new emerging technologies that will replace the remaining use of fossil fuels in the steelmaking process with carbon-neutral energy inputs.
Earlier this year Industrial Info reported on the company's plans to build a large-scale industrial plant for the direct reduction of iron ore and electric arc furnace-based steelmaking at its site in Bremen, as well as a DRI pilot plant in addition to an EAF in Eisenhüttenstadt. The company said the investment is in support of Germany's planned expansion of the country's hydrogen infrastructure. ArcelorMittal already operates Europe's only DRI-EAF plant in Hamburg, Germany, where the switch to using hydrogen instead of natural gas in the iron ore reduction process is being prepared. For additional information, see August, 2021, article--ArcelorMittal Reveals 'Green Steel' Plans for Two German Plants.
Aditya Mittal, chief executive officer of ArcelorMittal, said: "We have for the first time published a group target for 2030, alongside a more ambitious target for our European business. These targets we believe are aligned with our net zero 2050 ambition and we have also announced today a new collaboration with the Science Based Target initiative. These targets reflect the uneven pace of change that is the reality of the world's decarbonization journey. In regions of the world like Europe, where we are observing an 'Accelerate' policy scenario, we can be more ambitious -- with plans to reduce emissions by 35% within the next decade. In other markets we face a situation where being a first mover will result in us being uncompetitive in that market. For our target setting today we assume progress in other regions of the world will be at least five years behind Europe."
He added: "In Europe our strategy is largely focused on the Innovative DRI pathway. This reflects the commitment in Europe to prioritize the availability of green hydrogen at competitive prices. Spain's plan to accelerate the availability of renewable energy and green hydrogen underpins our recent announcement that ArcelorMittal Sestao will become the world's first full-scale zero carbon-emissions steel plant. In many respects the challenges confronting steelmaking today resemble those faced by renewable energy over a decade ago. The importance of solar and wind was widely acknowledged yet the technology remained economically prohibitive. Targeted, reliable and thoughtful policies supported innovation and investment that enabled both companies and their financing partners to make long-term planning decisions. We are optimistic that the same will happen in steel."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
