European aid for ArcelorMittal and ThyssenKrupp, decarbonized steelmakers

On Thursday, the European Commission authorized Berlin and Paris to grant €2 billion and €850 million respectively in public aid to steelmakers Thyssenkrupp and ArcelorMittal to finance projects to decarbonize their production using hydrogen.

Decarbonized steel mills: Aid from Germany and France for ThyssenKrupp and ArcelorMittal

The institution has “authorized the direct subsidy of 550 million euros and the (…) conditional payment of up to 1.45 billion euros granted by Germany to help ThyssenKrupp”, and “a French measure of 850 million euros for ArcelorMittal France”, according to a press release.

These aid packages aim to “decarbonize steel production” using “hydrogen”, at ArcelorMittal’s Dunkirk site in France (north), and Thyssenkrupp’s Duisburg steelworks in Germany (west), among the largest of their kind in Europe. In Dunkirk, ArcelorMittal’s project is expected to avoid the release of around 70 million tonnes of carbon dioxide over the project’s 15-year lifecycle, according to the Commission.

Thyssenkrupp’s decarbonization of the Duisburg site, meanwhile, will prevent the emission of 3.5 million tonnes of CO2 per year, making “an important contribution to achieving climate targets in Germany and Europe”, according to the group.

Rescuing the Duisburg plant: Germany grants crucial aid for conversion to green steel

Without this aid, the Duisburg site, which employs several thousand people, would be in danger, warned the group, which said it did not have sufficient financial resources to carry out this transformation alone. In mid-June, German Economics Minister Robert Habeck paid a visit to the plant’s employees, to whom he promised that “green steel made in Germany is possible”.

By the end of 2022, the Commission had given Germany the green light for a €1 billion subsidy to the German Salzgitter group for a project to decarbonize its steel production in the country. Green hydrogen, which can be used to store renewable electricity, is the preferred option for decarbonizing the polluting steel industry, which must become carbon neutral by 2030, according to EU targets.

The Commission has therefore dedicated an important project of common European interest (IPCEI) to this sector, enabling certain European rules on state aid to be waived. However, the time taken for authorization is irritating companies. Last November, ArcelorMittal called on Brussels to give the green light “more quickly”.