The EU Commission has granted the steel group ArcelorMittal Deutschland funding of €1.3 billion. The steel manufacturer intends to use the financial support to convert its production facilities at two sites. The total costs for the conversion to DRI plants, which use green hydrogen, will cost the Group 2.5 billion euros.
Specifically, the aid approval for ArcelorMittal relates to subsidies from the German government for the construction of a DRI plant for direct reduced iron (DRI) and three new electric arc furnaces at the Bremen and Eisenhüttenstadt sites. The steel group currently operates three coal blast furnaces and three oxygen furnaces here. This was announced by ArcelorMittal Germany on Monday (February 26). The company intends to provide the missing 2.5 billion euros from its own funds. Federal Economics Minister Robert Habeck held out the prospect of the €1.3 billion grant during a visit to the site in Bremen on February 5.
Initially, the new DRI plant will run on natural gas, which will gradually be replaced by green hydrogen. The company did not specify a date for the changeover. According to the Federal Ministry for Economic Affairs and Climate Protection, the plant in Bremen will consume 135,000 tons of green hydrogen per year once the DRI plant goes into operation.
Dr. Thomas Bünger, CEO of ArcelorMittal Bremen and Eisenhüttenstadt, described the EU approval as a "significant milestone on our path to climate-neutral production". The company will now continue with the planning of the "technology change in production".
Plants to go into operation in 2026
The technical planning for the use of production with a hydrogen-based DRI system and electric arc furnaces powered by green electricity is now to take place. Next, the global ArcelorMittal Group - the world's second-largest steel manufacturer by its own account - could then consider the final investment decision (FID). However, in addition to a hydrogen infrastructure, the availability of sufficient quantities of green electricity and hydrogen at competitive prices is crucial for this.
The new plants would then go into operation in 2026 and produce around 3.8 million tons of crude steel per year. This corresponds to what is currently produced in the blast furnace process. During the 16-year term of the project, ArcelorMittal aims to avoid emissions of up to 70 million tons of CO2.
