ArcelorMittal Belgium not ready for green steel investment due to weak market, CEO says
ArcelorMittal Belgium is not yet ready to carry out what would be the largest climate investment ever in the country, CEO Frederik Van De Velde said on Tuesday during a hearing in the federal parliament. He says the company remains committed to greening its Ghent site but current market conditions make the project unfeasible.
The project, announced in 2021, involves a complete switch from traditional blast furnaces to a low-carbon process using direct reduced iron (DRI) and electric arc furnaces. The investment of about 2 billion euros should sharply reduce CO2 emissions.
The company initially intended its Ghent site to take the lead. However, its site in Dunkirk later became the preferred location for investment, thanks to France's lower electricity prices. Ultimately, CEO Aditya Mittal decided to temporarily pause all major European climate investments, prompting political concern in both Belgium and France.
Van De Velde said on Tuesday that while ArcelorMittal remained committed to net zero emissions by 2050, it was currently unable to make the investments that will realise that ambition.
"Investing now would result in a negative return, given the current market," he said. "We are sticking to our plan, but will implement it at the right time."
Financial support needed
He also pointed out that Europe could not expect companies to invest billions in decarbonisation while paying taxes that competitors elsewhere do not face.
"Customers today are not willing to pay more for low-carbon steel," he said. "Without a European commitment to reduce the carbon intensity of finished products, demand remains limited."
With Flemish, federal and European authorities having pledged financial support for the project, Van De Velde made clear that ArcelorMittal would not use any subsidies for projects that are not implemented. "There has to be a real business case, otherwise there is no point in using that support."
Despite the delays, the 5,000 direct and 30,000 indirect jobs in Belgium are not at risk, he said. "We want to maintain our presence in Belgium and in Europe. Some support services will be delocalised to India, but the impact on Belgian employment will be limited."
#FlandersNewsService | © BELGA PHOTO JAMES ARTHUR GEKIERE
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