Green hydrogen is too expensive for ArcelorMittal Europe’s plants

Steel giant ArcelorMittal has said it cannot operate its European plants using green hydrogen, despite being granted billions of euros of EU subsidies to install equipment to do so, because the resulting green steel would be unable to compete on international markets. Instead, the Luxembourg-based steelmaker appears to be intending to use fossil gas instead of H2 indefinitely in its proposed “green steel” plants — or it may even delay the construction of subsidized “direct-reduced iron” (DRI) manufacturing units in Europe in favor of importing green hydrogen-derived DRI from abroad.

“We already know that hydrogen will be expensive in Europe,” Geert van Poelvoorde, head of ArcelorMittal’s European operations, told Dutch-language business magazine Trends. “We will not be able to use it because we would catapult ourselves completely out of the market.”

Producers such as ArcelorMittal are hoping to use hydrogen to decarbonize their steel mills, which together account for 7-8% of all global carbon emissions.

Traditionally, iron has been extracted from iron-oxide ore by burning carbon-rich coking coal in a blast furnace, where the fossil fuel produces high-temperature heat while simultaneously removing oxygen from the ore by converting it to CO2. This highly polluting method can be replaced with green hydrogen in a DRI facility, where the H2 reacts with the oxygen to produce steam (H2O) rather than CO2, but DRI plants can also be fuelled with cheaper fossil gas, reducing carbon emissions compared to a coke-fuelled blast furnace, but not eliminating them.