The switch to CO2-neutral steel production in Germany can only be successful if internationally competitive prices for renewable energies and sufficient quantities of hydrogen are guaranteed in the long term. For this reason, ArcelorMittal is calling for a clear state industrial policy.
The use of natural gas can help to significantly reduce emissions during the transition phase. ArcelorMittal has set itself the goal of reducing CO2 emissions in Europe by 35 percent by 2030 and implementing carbon-neutral production worldwide by 2050.
Challenges despite political promises
Despite significant progress and an EU-approved funding commitment from the federal government for the planned decarbonization projects of the flat steel sites in Bremen and Eisenhüttenstadt, the company is facing challenges, particularly due to high energy and hydrogen costs. Competitive energy prices are a decisive factor for the group's final investment decision to decarbonize production in Germany.
“Decarbonizing our production is a top priority for us, but the current costs and future price forecasts for energy and hydrogen pose a significant challenge,” emphasizes Dr. Thomas Bünger, German head of the flat steel works in Bremen and Eisenhüttenstadt. “An industrial policy aimed at reducing these costs is important to our success and the success of the entire industry. In addition, as a European company with our plants in Germany, we are an important part of the basic materials industry and therefore at the beginning of the value chain of our economy.”
Different approaches
When it comes to decarbonizing steel production, ArcelorMittal is pursuing various technological approaches in Europe. In Germany, the conversion of blast furnace technology to natural gas and later hydrogen-based direct reduction and electric arc furnaces is the focus of decarbonization plans.
CO2-neutral pig iron production requires a hydrogen price of around two euros per kilogram in order to remain competitive. The price for hydrogen is currently seven to nine euros per kilogram. It is also difficult to operate electric arc furnaces economically in the long term due to the high price of electricity.
Government measures must guarantee green electricity and hydrogen in sufficient quantities and at internationally competitive prices in the long term in order to overcome these challenges. The creation of a green lead market is also crucial for the competitive production of CO2-reduced steel. Labeling initiatives can be helpful to provide additional incentives, e.g. B. in public tenders and government procurement. In addition, decisive action must be taken against distortions of competition at national and EU level. This includes closing the remaining weaknesses in the CBAM (Carbon Border Adjustment Mechanism) in order to effectively reduce the risk of part of the industrial value creation moving outside Europe.
“We need the rapid expansion of renewable energies and the establishment of domestic hydrogen production while increasing hydrogen imports in order for the transformation to be successful,” says Lutz Bandusch, Vice President of ArcelorMittal Europe.
CO2-neutral production
ArcelorMittal remains committed to achieving carbon-neutral production worldwide by 2050. Active support through government measures is essential for the transition to a sustainable future.
ArcelorMittal is already implementing measures that make a decisive contribution to the sustainability of the company. This includes, among other things, the production of CO2-reduced steel under the umbrella brand XCarb® as well as participation in the ResponsibleSteel standard, which guarantees socially and environmentally friendly supply chains and production methods.
