ArcelorMittal Facing Scrutiny over Hydrogen Subsidy Use

SEATTLE (Scrap Monster): Steel major ArcelorMittal is under scrutiny for allegedly misusing subsidies intended for green hydrogen and decarbonisation pledges while simultaneously delivering record returns to shareholders.

A report by steel advocacy group, SteelWatch, has alleged ArcelorMittal is “failing in its claim” to be a climate change leader by spending just one-third ($500m) of the $1.5bn it pledged to invest into decarbonisation over the past three years.

Under the world’s second largest steelmaker’s “Innovative DRI” pathway it announced plans to transition its blast furnace plants to direct reduce iron (DRI) making processes using green hydrogen and/or electric arc furnaces (EAF) to clean up its operations.

Having shipped 55.6 million tonnes of steel in 2023 and subsequently generating 114.3 million tonnes of carbon dioxide equivalent (CO2e), ArcelorMittal has already secured some €3.5bn ($3.77bn) in subsidies to support its decarbonisation plans, which it estimated to cost $10bn by 2030.

Most recently, the company had €1.4bn ($1.5bn) of German grants approved by the European Commission to support the decarbonisation of two steel plants in Germany with low-carbon hydrogen.

With various other grants approved for similar projects across France, Belgium, Spain and Germany, all the plans have stated that natural gas will initially be used in the DRI process before transitioning to hydrogen. However, dates have not been set for the switches.

Courtesy: www.reuters.com