Europe’s biggest steelmaker ArcelorMittal SA [MT:NA] and the French government will invest EUR1.8bn (USD1.97bn) to cut emissions from the company’s steel plant in Dunkirk, as reported by Reuters on January 14. Within the EUR1.8bn investment, the French government’s subsidy package could reach up to EUR850m. The funds will help ArcelorMittal buy two electric furnaces and construct a direct reduction plant, which will lead to a 5.7% reduction in carbon emissions from the industrial sector of France. In addition, the company will sign a letter of intent with Electricite de France SA (EDF), an electric utility firm owned by the French state, for a long-term nuclear power supply contract.

The financial support is part of President Emmanuel Macron’s strategy to reduce emissions at France’s 50 most polluting industrial sites, which are responsible for 10% of the nation’s greenhouse gas emissions. Macron pledged that the government would double the EUR5bn budget already allocated for industrial decarbonization if executives of these 50 industrial sites present emission reduction plans within 18 months. Notably, the EUR850m subsidy for ArcelorMittal is included in the EUR2.85bn green subsidy scheme cleared by the European Commission last July, which aims to support ArcelorMittal and Thyssenkrupp [TKA:GR], the two biggest steelmakers in Europe, in decarbonizing their operations. Thyssenkrupp, benefiting from a EUR2bn financial aid package under the scheme, will use the funds to build a green steel plant at Duisburg, Germany.

Sources:

https://www.reuters.com/sustainability/france-arcelormittal-agree-2-bln-investment-cut-french-plant-emissions-2024-01-14/

https://www.bloomberg.com/news/articles/2024-01-14/arcelor-france-to-invest-1-8-billion-to-cut-steel-emissions

https://www.investmentmonitor.ai/news/arcelormittal-to-access-up-to-850-million-euros-to-decarbonise-plant-dunkirk-france/?cf-view

https://www.reuters.com/markets/commodities/eu-clears-french-german-state-aid-steelmakers-2023-07-20/