Green steel: Did ArcelorMittal ever want to decarbonize its blast furnaces?

Dunkirk (North), special correspondent.

Between the chimneys of the two blast furnaces at the ArcelorMittal steelworks in Dunkirk , the scene took on the appearance of a promise for the future. On January 15, 2024, former Economy Minister Bruno Le Maire visited the site to sign a state aid contract with the promise of €850 million in public money to green steel production at the northern plant . More than a year later, the ambition to decarbonize the blast furnaces seems more stalled than ever.

The project to replace one of the two gigantic cauldrons with an electric arc furnace, which uses less carbon, seems to have been frozen and the steel giant has even announced that it will cut more than 600 jobs at several sites in France .

A step in the wrong direction that the group attributes to a " context of crisis and regulatory uncertainty in Europe," and which employees strongly denounce. "The company is not investing in decarbonization, but tells us that it is the employees' fault if we do not achieve climate objectives," laments Aline, a union representative at the Dunkirk steelworks.

Although ArcelorMittal, the world's second-largest steel producer, is procrastinating, it is urgent to decarbonize the production of the metal, which is present in large quantities in everyday products , from cars to washing machines and building foundations. "If we include ore extraction , the steel industry represents up to 3.7 gigatons of fossil CO2 per year, or around 10% of global fossil CO2 emissions," noted an analysis note from France Stratégie last January.

With its two sites in Dunkirk and Fos-sur-Mer (Bouches-du-Rhône), ArcelorMittal contributes 16% of French industrial emissions, and even 2.8% of national greenhouse gas emissions, all sectors combined, explains a report by the NGO Climate Action Network published in July 2024.

International institutions have clearly grasped the challenge of decarbonizing the steel industry's energy resources to sustainably reduce emissions. The International Energy Agency published its recommendations in 2021: the steel industry should reduce its emissions by 25% by 2030 and by 92% by 2050. At the end of March, the European Commission also presented a plan to support and decarbonize European steel, combining the relaxation of state aid and support for long-term electricity contracts between manufacturers and suppliers.

But how can we transform steel, a high-emissions source, into green steel? Today, the traditional production method involves melting iron ore and coke—metallurgical coal—in blast furnaces to obtain molten metal. One solution could be to increase the recycling capacity of the sector by remelting scrap metal from end-of-life metal objects. In this case, the steel to be recycled can be remelted in the famous electric arc furnaces, which do not consume coal.

While this solution is promising for reducing greenhouse gas emissions , it remains imperfect, notes the France Stratégie analysis note, particularly because the quantity of scrap metal available does not cover steel production needs. "It is almost impossible to draw up scenarios that would completely "circularize" steel in the coming decades, even on a European scale," the authors of the document estimate. They add: "The decarbonization of primary steel production is therefore essential."

What this means is that, even when using iron ore, steel companies will have to learn to do without coal. A delicate task, but alternatives already exist. It is indeed possible to use electric furnaces—and not blast furnaces—to produce steel from iron ore, provided that the iron ore has been pre-reduced beforehand.

This chemical process can use different energy sources: coal, of course, but also natural gas, electricity, or hydrogen. This is the technique GravitHy has turned to. Last month, the company raised €60 million to establish an iron ore reduction site in Fos-sur-Mer using green hydrogen, produced in particular with nuclear energy. The resulting iron could then be smelted in electric furnaces.

The investments required to convert the steel production system, however, are putting the brakes on the industry's giants. "The additional costs can represent 100 to 200 euros per tonne of CO2 avoided," explains France Stratégie.

"Electric furnaces require a lot of energy, and the price has increased significantly in recent years. Sometimes, in the winter, during periods of extreme cold, we were even asked to stop production so that homes could heat their homes," recalls Christophe Delhelle, an ArcelorMittal employee who began his career working with an electric furnace. "This alternative has advantages, but also disadvantages."

Do these additional costs explain ArcelorMittal's reluctance to act towards decarbonization? According to a report published Tuesday, May 6, by the NGO SteelWatch, the steelmaker is completely at odds with its climate objectives. "The company's investments continue to be directed primarily towards coal-dependent steel production methods," notes the NGO's director, Caroline Ashley.

According to the report, the group invested only $800 million globally to decarbonize its production between 2021 and 2024, representing just 2.5% of its profits. Conversely, over the same period, its shareholders received $12 billion.

The steel group's employees are now concerned that instead of keeping its commitments regarding green steel, the company will opt for a new cost-saving technique: importing slabs from India or Brazil, those metal ingots ready to be rolled into coils. "If we import these slabs, produced elsewhere and transported here, it's not certain that our carbon footprint will decrease," says Laurent-Pierre Thueur, an employee at the Dunkirk site.