31 May 2024, 12:54
Carolina Kyllmann

Steelmaker ArcelorMittal to receive €1.3 bln in subsidies for green transformation of German sites

Clean Energy Wire / dpa / Tagesspiegel Background

Germany's economy minister has awarded steelmaker ArcelorMittal 1.3 billion euros to drive the decarbonisation of its production sites in the states of Bremen and Brandenburg. The conversion to low-emissions steel production poses a task "that companies cannot finance alone," economy minister Robert Habeck was quoted by news agency dpa as saying in an article published by Tagesspiegel Background. "We are ultimately faced with a choice: Do the companies close down at some point and dissolve the sites or do they get political support?"

ArcelorMittal said it aims to replace its blast furnaces with electric arc furnaces and construct a so-called direct reduction plant, which uses natural gas or hydrogen instead of coal or coke. The new plants are scheduled to go into operation in 2026 and produce more than 3.8 million tonnes of green steel annually, according to the economy ministry However, ArcelorMittal said the final investment decision depends on the guarantee of internationally competitive energy prices and sufficient quantities of green hydrogen, according to dpa.

The government had already announced the funding pledge in early February, and confirmed it had received EU approval under state aid rules at the end of the month. It is also supporting decarbonisation of manufacturer Salzgitter AG, Thyssenkrupp Steel Europe and the companies of Stahl-Holding-Saar. Thyssenkrupp in April announced a drastic reduction of its steel production in Germany, citing high energy costs and tight emission reduction regulation as reasons for its decision.

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