ArcelorMittal's cancellation of green conversion puts steelworks at risk, unions warn

Steelmaker ArcelorMittal's withdrawal from the planned climate-friendly conversion of two plants in Germany puts the future of its steelworks in the country at risk, unions warned in a report by news magazine Der Spiegel. The metalworker's Union (IG Metall) said the decision was a "serious threat" to the future of ArcelorMittal's plant in Bremen.

"The rejection of the direct reduction plant was already apparent, but the announcement that no electric arc furnace will be built in Bremen for the time being has shaken the company's credibility" among its workforce, policymakers, and citizens, the union said. Ines Schwerdtner, who heads the leftwing party Die Linke, called the decision "an alarm signal" for Germany as an industry location, given that "without transformation, there is no future viability." 

ArcelorMittal also canceled a decarbonisation project in the city of Eisenhüttenstatt in the state of Brandenburg. The state’s economy minister Daniel Keller from the Social Democrats (SPD) said “it’s necessary for the EU to better protect the European steel market from cheap imports with much lower environmental standards and to find an adequate response to tariff policies of the US.” State premier Dietmar Woidke, also a Social Democrat, said his government would do “everything” to protect jobs, given that the steelworks are the "heart and backbone" of the region's economy. “Germany’s and Europe’s standing as an industry location must not be put at risk,” he warned.  

The Luxembourg-based steelmaker on Thursday announced it would drop plans for converting two plants in the country, in Bremen and Eisenhüttenstadt, to carbon-neutral production, arguing that energy costs in Germany were too high to allow for profitable operations. “Meanwhile, the European steel market is under unprecedented pressure due to weak demand and high imports,” said ArcelorMittal. The projects were supposed to receive state funding of roughly 1.3 billion euros, but the company said that the conditions and deadlines tied to the funding were too tight for it to be viable. 

The German economy ministry told Der Spiegel that no money had been paid out yet and the company therefore would not have to pay anything back. It added that the implementation of other projects for decarbonising steel production by the companies Salzgitter, Thyssenkrupp and SHS with a total volume of about 5.6 billion euros had already started.