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ArcelorMittal surprisingly abandons plans for green steel!
ArcelorMittal cancels plans to produce green steel in Eisenhüttenstadt due to economic uncertainty.
ArcelorMittal surprisingly abandons plans for green steel!
What a shock for the steel industry in Germany! The world's largest steel producer ArcelorMittal has surprisingly abandoned its plans to switch to green steel production in the Bremen and Eisenhüttenstadt factories. While the discussions and planning were already advanced, the general conditions are now so bad that they question the economic viability. In a statement it was announced that the decision was motivated not least by doubts about the profitability of CO2-reduced steel production.
However, in recent months the situation has been particularly challenging for many in the industry. According to reports The high market prices and price fluctuations as well as the difficulties in procuring green hydrogen were decisive for the decision. These raw materials are essential for the desired climate-neutral production, but are currently not available in sufficient quantities and are also expensive. The Federal Ministry of Economics also regrets this, noting that the promised state funding for these changes - around 1.3 billion euros - will largely remain unused.
A setback for decarbonization
The steel industry is not an insignificant player when it comes to achieving Germany's climate goals. It is responsible for about 8% of the country's total greenhouse gas emissions. Therefore, major changes are necessary. Emissions are to be reduced by 55% by 2030, while the entire EU wants to be climate neutral by 2050. These ambitious goals were in stark contrast to ArcelorMittal's decision to move away from its original plans.
In contrast, other companies such as Thyssenkrupp and Salzgitter remain optimistic and estimate their switching costs at around 10 billion euros and 3 billion euros, respectively. It becomes clear that the steel industry has to withstand enormous financial pressure in order to become more environmentally friendly. “The high investment costs for switching to clean manufacturing processes are estimated at around 35 billion euros,” highlights an expert report. The turnaround initiated by ArcelorMittal signals that there is a need for action here.
The challenges of the hydrogen economy
Green hydrogen is considered a key resource for the seamless transition to climate-neutral steel production. But practice looks different. The steel production industry is currently facing significant risks. High electricity prices in Germany are just another critical point in this equation. Even former ministers like Habeck express their regret about the cancellation of the projects and emphasize the importance of these climate initiatives. The need for financial support continues unabated. A pilot project on climate protection agreements between the state and companies could help here.
What happens next remains exciting. ArcelorMittal's regression could also have longer-term effects on the competitiveness of the European steel industry. Especially because the prices for green steel itself could be 30-40% higher than those for conventional products from countries with relaxed climate regulations. Both companies and politicians have a duty to find solutions.
Overall, the situation remains tense. The industry is facing major challenges in restructuring, and ArcelorMittal's withdrawal is a clear reminder that the transformation from theory to practice is still a rocky road.