ArcelorMittal, the world’s second-largest steelmaker, announced on Friday that it is postponing planned green investments, due to uncertainties surrounding European Union regulatory directives. Earlier this year, the company secured €850 million ($885 million) in subsidies from the French government to support its €1.7 billion decarbonization investment program, scheduled to run through 2030 at its Dunkirk and Fos-sur-Mer sites in France.
However, ArcelorMittal has yet to finalize investment decisions for these projects, including the planned replacement of two out of three blast furnaces in Dunkirk with green hydrogen-powered facilities, the company told Reuters.
“We are operating in a difficult market, and there are a number of policy uncertainties that are impacting the industry. We need an effective carbon border adjustment mechanism, as well as more robust trade defence measures, to strengthen the business case,” the company said in a statement.
ArcelorMittal has also mentioned that it is also waiting for the European Commission’s decision regarding the Steel and Metals Action Plan
“Arcelor has been very consistent in its commentary that it won’t commit to material decarbonization spending unless the right circumstances are in place from broader EU policy,” KeyBanc analyst Philip Gibbs told Reuters.
In a statement to the AFP news agency, Industry minister Ferracci said the European steel industry is currently in crisis, with demand and prices at historically low levels.
Among the world’s largest contributors to CO2 emissions, European steelmakers face mounting pressure to reduce their greenhouse gas output while at the same time maintaining profitability amid fierce competition, mainly from China.