Nearly 80 million tonnes of steel produced per year. 160,000 employees worldwide, including 15,000 in France, a turnover of more than $79 billion in 2022 and steel production which powers 17% of cars built in the world… The steel group ArcelorMittal is a industrial juggernaut. But with an activity that requires constant use of coal – coke, essential to produce its alloys – it is also one of the most emitting companies on the planet. In France, the group alone represents almost a quarter of CO2 emissions from the industrial sector.
Forced to decarbonize, the company (which is aiming for carbon neutrality in 2050) must now make very significant changes to its industrial processes. New reactors for processing iron ore, use of hydrogen, CO2 capture… There are many levers. But going green has a price: nearly 9 billion euros will be invested by the group by 2030. And competition, distorted by regulatory differences, is fierce. Is the relocation outside of Europe of part of ArcelorMittal’s activities inevitable? Eric Niedziela, president of ArcelorMittal France, does not rule out this possibility.
L’Express: At European level, ArcelorMittal has set itself the objective of reducing its emissions by 35% by 2030. This means radically changing industrial processes, how do you plan to achieve this?
Eric Niedziela: We have three means of action. The first is to integrate even more scrap metal into our current steelmaking processes, which are highly carbon intensive due to use in coal blast furnaces. The use of this recycled material should double by 2030 to allow us to reduce our CO2 emissions by 8 to 10% compared to our current releases. The second lever, which represents a real shift, is to do without coke – coal – and to reduce iron ore with natural gas. This solution would allow us to reduce carbon emissions by almost 65% compared to a conventional blast furnace which emits 1.8 to 2kg of CO2 per kilo of steel produced.
Ultimately, natural gas will be replaced by hydrogen when the latter becomes available and competitive. This solution will reduce CO2 emissions by around 90%. But we’re not there yet. The third solution, which will intervene in addition, is the capture of CO2, followed by its storage or reuse.
So natural gas will retain an important place in your industrial processes?
It must be understood that the production of green steel using hydrogen has never before been demonstrated on this scale and for such long-term capacities. The devices integrating natural gas or hydrogen are the same, which is why we want to start with gas, because there is an essential learning curve before arriving at hydrogen and because the latter is not not available today. That said, it must be emphasized that we are directly impacted by the war in Ukraine and the regulation of the European Commission which has banned the use of Russian gas for energy and more generally for fossil industries. However, it is a reducer of iron ores in our processes.
Are you requesting an exception to make the transformation easier?
I don’t know if we should speak of an exception. We have always considered natural gas as a transitional energy in Europe, but it turns out that the use of this energy used in the United States to manufacture the same product that we produce in Europe is not taxed like here. However, the price of steel is global, and Europe leaves the door open to imports, so we no longer operate in fair competition. This means that investments made by our American competitors, particularly due to the green investment program of theInflation reduction actcan be much more efficient economically and at equivalent carbon intensity.
Can the carbon tax at Europe’s borders respond to this problem?
It is a mechanism that we have called for, but we will only know in 2026 if it is effective and these conclusions will be based on an analysis carried out in 2023… However, we must invest now, to respect our commitments and because that our free emissions allowances are set to end almost in 2030.
Beyond the carbon adjustment mechanism, we must strengthen barriers to imports on our continent. When Donald Trump launched his policy ofAmerica first and placed tariffs on steel entering the United States, imports headed to Europe. The EU responded by implementing import quotas, which are relaxed each year. But that is no longer enough. Quotas must be stricter, because we now have to deal with production overcapacity in China, which increases the flow of steel to Europe. This situation makes our activity untenable, from an environmental point of view, but also from a social point of view. Especially since our competitors benefit from favorable conditions and investment aid schemes that we do not have in Europe.
There are many doubts about hydrogen, its availability but also its cost. How do you see these issues?
If we want hydrogen to play an important role in the decarbonization process, we must look at things pragmatically. Do we have enough electrolyzer power [NDLR : les machines permettant de produire de l’hydrogène à partir d’eau et d’électricité] ? There has been a lot of progress in these technologies in recent years, but in 2022, global production capacities – concentrated in China – reached 800 megawatts, and approximately 1.4 gigawatts in 2023. But 800 MW is the power which we would need to decarbonize the Dunkirk site alone… The technology, even if it is progressing, is therefore very far from the 6.5 gigawatts of electrolyser capacity that we would need in 2030. The objectives which have been set concerning the use of hydrogen may not be achieved in time.
Let’s also not forget the price of electricity which accounts for 70% of that of green hydrogen. Even if renewable energies are becoming less and less expensive, it is not possible today to produce competitive green hydrogen. What we see today is hydrogen at around 8 euros per kilo. At this price, to produce pre-reduced iron ore, we would go out of the market.
How do you plan to resolve the issue of the cost and delivery of electricity?
The volumes of electricity required for our new production processes will be very significant: between four and fourteen times more than today if we include the production of hydrogen. We therefore entered into a long-term contract with EDF for a supply of electricity spread over several years. This must cover a significant part of our needs. We are also in discussions with RTE to upgrade the high voltage line located between the Gravelines nuclear power plant and our production site in Dunkirk. The power supply of our installations in Fos-sur-Mer will also have to be redesigned.
How much do you estimate the price of “green” steel compared to that produced in your blast furnaces currently?
I cannot answer this question precisely. In Europe, imports can be made at prices well below our production costs. If we manage, across all industrial levers, to produce carbon-free steel which is equivalent to what we produce today with coal, then we will remain steel producers on the Old Continent. But for the moment, we do not have the feeling that in the very long term, our customers will be able to accept steel production that is done with hydrogen at 8 euros per kilo.
If we cannot get a reasonable electricity price, part of our activities – the manufacture of prereduced – will have to be carried out elsewhere. The finalization of the products, which requires the use of electric ovens, would remain in France.
Could part of ArcelorMittal’s activities be relocated to the United States?
We are not there. However, I note that the United States has a policy that supports demand while Europe taxes steel producers who do not decarbonize. We already pay CO2 duties to produce part of our steel while importers are not taxed. In our production processes, the green electricity resource will become decisive. So regions where you find a lot of solar, wind, or gas with carbon sequestration, become competitive geographies.
Is the transition incompatible with maintaining competitiveness in Europe?
No, I think this transition is possible if Europe protects itself from imports. We must invest to decarbonize, which our foreign competitors are not obliged to do. We expect European regulation to become aware of the time pattern in which it places us vis-à-vis other parts of the world.
However, you benefit from very significant financial support from the State: 850 million euros for the transformation project in Dunkirk. Isn’t that enough of a boost?
This is one of the very favorable elements. And this is why we believe in this notion of energy transition for our sites. But we must see over the duration of the project, that is to say around fifteen years, what the profitability will be.
ArcelorMittal’s activities in India do not seem to be as low-carbon as those you present in Dunkirk. Is there not an ambiguity in pursuing these projects?
There is no contradiction between what we do in India and in Europe. We have a goal of reducing the group’s carbon footprint worldwide by 25%. And I can guarantee you that the blast furnaces that are being built in India will already significantly reduce our carbon footprint on site because they will emit much less CO2 and will be ready to use capture technologies.
In a global group like ours, the idea of working on different solutions is necessary. This allows us to determine which is the best process and implement the most suitable one in each region of the group. I don’t see any contradiction, I rather think it’s an excellent strategy.
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