ArcelorMittal signs MoU with Spanish government to support € 1 billion investment in carbon-free technologies

  • New DRI and EAF installations in Gijón will reduce carbon emissions in the Spanish operations of the company approximately 50%

  • the DRI installation in Gijón will also allow ArcelorMittal Sestao will be the of the world first life size zero carbon emissions1 steel mill

13 July 2021, 13:45 CET

ArcelorMittal today signed a memorandum of understanding with the Spanish government which provides for a € 1 billion investment in decarbonization technologies at ArcelorMittal Asturias’ plant in Gijón. Investments will reduce CO2 emissions from ArcelorMittal’s Spanish operations up to 4.8 million tonnes, which represents approximately 50% of emissions, over the next five years2.

The MoU sets out the commitment of ArcelorMittal and the Spanish government in the transition to a carbon-free steel industry. ArcelorMittal will introduce new manufacturing processes that will contribute to a significant reduction in CO emissions2 emissions. It will also step up its R&D capacities in Spain to support new projects and innovation requirements. The Spanish government will encourage reforms and investments to support the development and growth of a strong, more competitive and sustainable industrial sector, and will endeavor to provide maximum financial support to the project, in accordance with Spanish legislation and regulations of the European Union.

Given the significant cost associated with the transition, in terms of capital and operating expenses, ArcelorMittal expects this support to cover at least half of the additional costs to allow its operations to remain competitive while accelerating its decarbonisation program.

The MoU was signed at an event at ArcelorMittal Asturias factory in Gijón, attended by ArcelorMittal Executive Chairman Lakshmi Mittal, CEO Aditya Mittal and President of Spain, Pedro Sánchez as well as Raül Blanco, the general secretary of industry, and Adrián Barbón, president of the regional government of Asturias.

At the heart of the plan is a 2.3 million tonne green hydrogen direct reduction iron (DRI) unit, complemented by a 1.1 million tonne hybrid electric arc furnace (EAF). This marks the start of the Gijón plant’s transition from the basic oxygen furnace blast furnace steel production route to the DRI-EAF production route, which has a significantly lower carbon footprint. The new DRI – which will be the first of its kind in Spain – and the EAF will be in production before the end of 2025.

To maximize the emission reduction potential, green hydrogen will ultimately be used to reduce iron ore in the DRI, with the EAF being powered by renewable electricity. The support of national and regional governments in this project is crucial as it will allow ArcelorMittal to have access to green hydrogen supplied by a consortium of companies which will cooperate in building the necessary infrastructure to produce hydrogen. in the Iberian Peninsula using solar-powered electrolysis and transporting it directly through a network of pipelines. The initiative involves the construction of several large-scale solar farms, with hydrogen produced in situ and with the corresponding impact in terms of employment.

The Gijón DRI will also supply the company’s Sestao plant, located about 250 km from Gijón, where all production is already carried out from the electric arc furnace. This means that by 2025, ArcelorMittal Sestao will produce 1.6 million tonnes of steel and be the first large-scale steel plant in the world to achieve zero carbon emissions.

Speaking at the signing of the memorandum of understanding in Gijón, Aditya Mittal, CEO of ArcelorMittal, said:

“It is widely accepted that for the world to reach net zero by 2050, faster progress over the next decade is essential. The Memorandum of Understanding we signed today will play an important role in this regard. Construction of the new green DRI hydrogen plant at Gijón We will not only reduce emissions of our Spanish operations by half, but will also result in the first zero carbon emissions on a large scale steel plant in Sestao.

“It is clear that this is a project that will require the support of many different partners to be successful; our plan is based on the supply of affordable and large-scale hydrogen, access to sustainable financing and a favorable legal framework that allows us to be competitive on a global scale. the Spanish government Has clearly defined plans to move the country to a low-carbon economy and I have been impressed by the progress made in creating the energy infrastructure that this green economy will need.

“As a large emitter, the steel industry can make a vital contribution to achieving net zero. by 2050. This project demonstrates what is achievable.

Expressing their support for the plan, Spain Industry Minister María Reyes Maroto said:

“The Spanish government and the ArcelorMittal Group fully agree that the transition to a low-carbon economy is a key objective for Spain, and they both recognize the industrial, technological and regulatory challenges that this transition poses for Spanish industry, as well as the opportunities it represents. offers, in terms of innovation and improvement of competitiveness. The Spanish government, through the Ministry of Industry, Trade and Tourism, will strongly support a new framework of institutional relations between the government and the ArcelorMittal group, as the Spanish government recognizes the importance of the steel industry for the development of the economy, while recognizing that the industry needs a stable and predictable legal framework as the best tool to enable it to be competitive and to achieve the objectives set in terms of energy transition and digitization , both at national level and at European Union level. In this regard, the Spanish government is exploring regulatory instruments to support the industry in the transition process, such as compensation programs for electricity-intensive industries, tools to promote improved energy efficiency , public financing of digitization, instruments to promote industrial investments, training programs and strategies to promote the use of clean fuels.

ArcelorMittal Europe aims to reduce CO emissions2 30% of emissions by 2030 and ambition to be at net zero by 2050. The company is pursuing two paths to achieve this: the Innovative DRI and the Smart Carbon.

ArcelorMittal Spain’s operations are already contributing to the reduction of CO emissions2 emissions from the company’s steel activities. Earlier this year, ArcelorMittal Asturias completed its project to capture hydrogen-rich coke oven gas and feed it back into the blast furnace, replacing some of the coke used in the blast furnace. The deployment of this innovative technology will result in a reduction in CO emissions2 125,000 tonnes of emissions per year, or the equivalent of the emissions generated by the annual consumption of 84,000 Spanish households equipped with individual natural gas heating systems. These CO2 savings have already generated XCarb ™ green steel certificates, which were launched by the company in March 2021, allowing ArcelorMittal customers to report a reduction in their CO Scope 32 emissions.

ENDS

Notes to Editors:

The ArcelorMittal Asturias plant in Gijón currently operates using the basic blast furnace and oxygen furnace steelmaking method.

It has two blast furnaces producing hot metal for the Avilés and Gijón steelworks:

  • The Avilés steelworks produces slabs for the hot rolling mill (in Avilés) and the heavy plate rolling mill (in Gijón).

  • The Gijón steel plant produces billets for the wire rod (in Gijón) and blooms for the railway plant (in Gijón).

Once the plan announced today is implemented:

  • Gijón blast furnace B will produce hot metal for the Avilés steelworks

  • DRI will be produced in Gijón for Sestao and the steel plant in Gijón, which will be redeveloped as an EAF

ArcelorMittal Sestao operates two FEAs and manufactures a range of flat products. Sestao is about 250 km east of Gijón.

About ArcelorMittal

ArcelorMittal is the world’s leading steel and mining company, with a presence in 60 countries and primary steel production facilities in 17 countries. In 2020, ArcelorMittal achieved sales of $ 53.3 billion and crude steel production of 71.5 million metric tons, while iron ore production reached 58.0 million tons metric.

Our goal is to help build a better world with smarter steels. Steels manufactured using innovative processes that consume less energy, emit much less carbon and reduce costs. Cleaner, stronger and reusable steels. Steels for electric vehicles and renewable energy infrastructure that will support societies in their transformation this century. With steel at the heart of our concerns, our inventive people and an entrepreneurial culture at heart, we will support the world in this change. This is what we need to be the steel company of the future.

ArcelorMittal is listed on the New York (MT), Amsterdam (MT), Paris (MT), Luxembourg (MT) stock exchanges and on the Spanish stock exchanges in Barcelona, ​​Bilbao, Madrid and Valencia (MTS).

For more information on ArcelorMittal, please visitisit: http://corporate.arcelormittal.com/

Contact details ArcelorMittal Investor Relations

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Contact details ArcelorMittal Corporate Communications

Paul weighs
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1 On a Scope 1 and 2 basis.

2 If green hydrogen was not available at affordable rates by the end of 2025, natural gas would be used to power the DRI furnace. All the same, this would result in a very significant reduction in CO2 emissions, by 4 million tonnes, or around 45%.


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