Europe puts flagship green project in jeopardy: ArcelorMittal considers shutting down the Steelanol plant in Ghent
Steel giant ArcelorMittal is considering closing its pioneering Steelanol facility in Ghent, Belgium - a project that has long been presented as a key part of its decarbonisation strategy. The plant, which converts CO₂ from blast furnace gases into ethanol, is struggling under restrictive and unsupportive EU regulations, which have made its continued operation financially unsustainable.
"We’re giving ourselves about a year to decide whether to shut it down," warns CEO Frederik Van de Velde. "Even if we solve the technical issues and reach the planned output of 60,000 tonnes of ethanol per year, the economics will remain challenging without changes to the regulatory framework."
Steelanol captures residual gases from the steelmaking process that would otherwise be used to generate electricity, and uses fermentation to convert them into ethanol. This ethanol can be used as a chemical feedstock or fuel, turning industrial waste into a valuable product while significantly reducing carbon emissions. At full capacity, the plant could avoid up to 120,000 tonnes of CO₂ emissions annually.
€250 Million Investment at Risk
The project represents an investment of €215 million, rising to €250 million when combined with the adjacent Torero project, which transforms waste wood from recycling centres into biocoal to replace fossil carbon. Funding has come from multiple sources: €35 million from the EU, the Flemish government and the Belgian government; a €75 million loan from the European Investment Bank; and €140 million from ArcelorMittal itself. If the facility closes, it will result in a significant financial loss. The plant currently employs 35 people, who would be redeployed within the company.
The European Commission is fixated on hydrogen as the sole route to climate neutrality
For ArcelorMittal, this issue highlights a broader systemic flaw in EU climate policy. “The European Commission is fixated on hydrogen as the sole route to climate neutrality,” says Van de Velde. "Meanwhile, other technologies like this one — which are operational today and deliver immediate CO₂ savings — are not given a fair opportunity."
Van de Velde notes that, despite high electricity demands and questionable feasibility, hydrogen continues to receive heavy subsidies. "In Europe, where electricity is scarce, it is absurd that this kind of innovative recycling is being ignored."
One of a kind
Steelanol is the only facility of its kind in Europe, with only one comparable plant in China. Ghent was intended to serve as a pilot site for wider implementation across the company’s steelworks. However, the ethanol produced is not currently recognised under EU rules as either an ‘advanced biofuel’ or a ‘recycled fuel’, meaning the emissions it avoids cannot be deducted from ArcelorMittal’s carbon balance.
It shows how difficult it is to harmonise legislation in Europe
“We expected the ethanol to qualify as an advanced biofuel, but that recognition has not been granted,” adds Van de Velde. "It shows how difficult it is to harmonise legislation in Europe. Often, we have no idea what the regulatory landscape will look like in five to eight years."
ArcelorMittal says it continues to engage with policymakers at Flemish, Belgian and EU levels. However, the company warns that without a stable and predictable policy framework, sustainable investment in European steel production will remain uneconomical.
#FlandersNewsService | © BELGA PHOTO NICOLAS MAETERLINCK
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