ArcelorMittal Europe has announced that it will not move forward with its Direct Reduced Iron (DRI) and Electric Arc Furnace (EAF) installations at its German flat steelmaking operations. The company formally notified the German Federal Government that it cannot meet the construction deadline tied to its financial support agreement—effectively forfeiting €1.3 billion ($1.4 billion) in public funding.
The decision follows months of hesitation. In November 2024, ArcelorMittal warned it was unable to take final investment decisions for DRI-EAF projects in Europe due to an unfavorable mix of policy ambiguity, volatile markets, and slow progress in clean energy infrastructure. The cancellation cements the company’s shift toward a phased decarbonization strategy, with focus now turning to detailed EAF planning for future conditions that may better support low-carbon production.
At the heart of the decision lies a growing mismatch between industrial ambition and practical feasibility:
In parallel, weak steel demand across Europe has been compounded by rising imports. ArcelorMittal is now calling for flat steel import levels to be halved, citing market saturation and a lack of protective trade measures as existential threats to the domestic industry.
The company has acknowledged it is unlikely to meet its 2030 carbon intensity reduction goal, citing the broader failure of energy transitions to scale as expected. Global implementation of Nationally Determined Contributions (NDCs) is projected to cut emissions by just 10% by 2030—far short of the 28% required to limit warming to 2°C, or the 42% needed for 1.5°C targets under the Paris Agreement.
“We appreciate the financing offered by the German government,” said Geert van Poelvoorde, CEO of ArcelorMittal Europe, “but even with financial support, the business case isn’t strong enough. This shows the scale of the challenge.”
While Germany’s outlook remains bleak for green steel investments, ArcelorMittal is pivoting its next EAF project to Dunkirk, France, where electricity prices and policy support are more favorable. This shift signals a broader industrial recalibration, as manufacturers increasingly weigh geographic advantage in the global race to decarbonize.
ArcelorMittal is engaging with the European Commission and Member States to push for more aggressive policy support, including:
Without immediate action, Europe risks falling behind in the industrial transformation needed to meet climate goals and retain domestic production capacity.
