ArcelorMittal: the steel giant’s green strategy

ArcelorMittal is the world’s second-largest steel group, with annual steel production of 71.5 million tonnes in 2020. It is investing substantial resources in decarbonizing its steel production.


In this section, we will focus on the company’s plans to decarbonize its steel production. We will then briefly present the history of this global group.

Projects to decarbonize steel production

Steel production is one of the main sources of greenhouse gas emissions: around 7% of total emissions! This is due to the current process, which automatically produces large quantities of CO2. Indeed, the main current process, blast furnaces, vaporizes carbon (coke) on iron to deoxidize it, then, as the carbon mixes with the iron, the carbon is removed by oxidizing it, generating even more CO2.

ArcelorMittal’s European division is aiming for a 30% reduction in CO2 emissions by 2030, and to become carbon-neutral by 2050. To achieve this, they propose two axes:

  • Carbon capture and utilization.
  • The use of hydrogen, whether injected into blast furnaces or via the DRI-EAF route.

They put all their forecasts at an increase in production costs of 30-60% for the Smart Carbon route and 50-80% for DRI. This is very well presented in their document “Climate Action in Europe”. (5)

The manufacturer is already using other, more secondary solutions:

  • Reusing steelworks slag to produce cement
  • Replacing coke with biochar
  • Heat recovery.

Carbon capture and storage (CCUS)

One way of decarbonizing steel mills would obviously be to capture and use/store carbon. ArcelorMittal calls this pist “Smart Carbon”. At its Steelanol unit in Ghent (Belgium), the company has been working with Lanzatech on the possibility of biologically transforming carbon from gases into bioethanol or other raw materials. This is the Carbalyst project, which represented an investment of €180 million, to design the industrial prototype. It is expected to reduce the plant’s emissions by 125,000 tonnes of CO2 and produce 80 million liters of bioethanol. (5) However, production is due to start at the end of 2022. (7)

Based on this model, the CarbHflex project in Fos-Sur-Mer was announced on November 3, 2020. (7)

The IGAR project, to produce syngas from CO2, is another example.

Hydrogen to decarbonize iron reduction

Like carbon, hydrogen is a reducing gas, which means it can be used to extract the oxygen present in iron in its natural state (hematite Fe2O3). It can therefore replace coke in this role. There are two ways of using it for this purpose: either by injecting it into the conventional process (blast furnaces), or by using the DRI-EAF track.

We take a closer look at this subject in our article on decarbonizing power generation with hydrogen.

Hydrogen injection into blast furnaces

The simplest solution is undoubtedly to inject hydrogen into blast furnaces. This reduces the need for coke. This is the principle behind the Igar project at Dabrowka Gornicza and Dunkirk.

Coke oven gases, which are very rich in hydrogen, would be ideal for this purpose. A project in Spain (Asturias) is scheduled to start in 2021. (4) Projects of this type are reportedly underway in Ensenhüttenstadt and Bremen.

DRI-EAF: totally carbon-free iron reduction

By applying hydrogen to hematite, oxygen is extracted and pure iron is produced by “direct iron reduction”. It is then melted in an electric arc furnace. This is the DRI-EAF (Direct Reduced Iron – Electric Arc Furnace) route.

Note that DRI is not necessarily done with hydrogen. The most popular method at present is to use methane, and the manufacturer admits that “initially, the DRI installation would use natural gas”. However, it is developing the possibility of using hydrogen at its Hamburg facility.

Similar projects are planned for Dabrowka Gornicza, Hamburg, Bremen, Ghent, Dunkirk, Avilés (ES) and Fos-Sur-Mer.

On February 3, 2022, ArcellorMittal announced an investment of 1.7 billion euros for a DRI-EAF unit

Reuse of steelworks slag (cement, public works, etc.)

Steelworks slag is traditionally used in the composition of cement, in addition to its main component (which is highly polluting to produce), clinker. ArcelorMittal set up a joint venture with Ecocem Materials in 2007: Ecocem France. Ecocem France would valorize blast-furnace slag (in particular?) in the form of a cement using less clinker and with a carbon footprint “34 times smaller than that of conventional cement”(ArcelorMittal)

We take a closer look at the cement issue in our article on decarbonizing cement with hydrogen.

Replacing coke with biochar

ArcelorMittal has launched the Torero project in Ghent to replace coke with wood transformed into biochar.

Heat recovery

The Florange site would use “the heat present in the fumes to heat the air that will serve as oxidizer for the gas consumed in the furnaces”. (2)

Plant heat can also be recovered to heat nearby towns. This is the case for the Dunkirk plant (which has been doing this since 1982, saving 450,000 tonnes of CO2 (per year?)) and the Saint-Chély d’Apcher plant. It was announced at Florange for 2018, but I don’t know where it stands. At Dunkirk, it is also used to generate electricity. This would represent 200MW of electricity every year. (2)

A brief history of ArcelorMittal

The rise of Mittal Steel

First established in 1976 as a subsidiary of one of the companies in the Indian steel group Ispat Industries (created by Lakshmi Mittal’s father) under the name ISPAT International, the company broke away from this link in 1995.

The company’s main growth lever was to buy out ailing steel companies (1), modernizing their operations. In particular, it bought Irish Steel from the British government for £1 in exchange for a commitment to inject £25 million, with an additional subsidy of £38.2 million.(source)

By merging with LNM Holdings in 2004, ISPAT International became Mittal Steel. It was already the world’s leading steel producer in 2005, with annual steel production of 57 million tonnes.

Arcelor, a former steel giant

The history of Arcelor goes back to the Luxembourg company Aciéries Réunies de Burbach-Eich-Dudelange (ARBED SA), formed in 1911 by the merger of several companies, whose origins date back to the 19th century (1838 for Les Forges d’Eich, Le Gallais, Metz et Cie; 1856 for Société Anonyme des Mines du Luxembourg et Forges de Sarrebruck and 1882 for Société Anonyme des Hauts Fourneaux et Forges de Dudelange). Almost a century later, in 2001, the company merged with Aceralia and Usinor to form Arcelor. In 2005, it produced 42.8 million tonnes of steel a year. It was the world’s second-largest steel producer.

The takeover bid for Arcelor, the birth of ArcelorMittal

Mittal Steel launched its takeover bid on January 27, 2006. Initially rejecting the takeover offer, Arcelor’s management accepted the 44% acquisition on June 25, 2006. The two companies merged in two stages, becoming ArcelorMittal in 2007.

Nevertheless, the group suffered setbacks and by 2020 was producing just 71.5 million tonnes, behind China’s Baowu. Profitability, however, seems to have improved significantly. They plan “to reduce its CO2 emissions intensity by 25% by 2030 compared with 2018 – and by 35% in Europe”.(Figaro)

FAQ

What is ArcelorMittal’s core business?

ArcelorMittal is the world’s leading steel and mining group. Because of the environmental challenges of its business and its strategic nature, it is heavily involved in innovation through its XCarb innovation investment fund.

Which companies formed the Arcelor group?

Arcelor was itself the result of the merger of three European steel companies: Aceralia, Arbed and Usinor. In 2006, it was absorbed by Mittal Steel Company and became ArcelorMittal

Who are ArcelorMittal’s main shareholders?

Lakshmi Mittal owns 33.8% of the company. Next in line are funds such as BlackRock (3.46%), Central Bank of Norway (1.98%), The Vanguard Group (1.75%) and Crédit Agricole (1.3%).


Sources:

  1. History of Arcelor Mittal, https://www.steelonthenet.com/kb/history-arcelor-mittal.html
  2. Circular economy, https://france.arcelormittal.com/developpement-durable/economie-circulaire.aspx
  3. ArcelorMittal, https://fr.wikipedia.org/wiki/ArcelorMittal
  4. “ArcelorMittal Europe to produce green steel from 2020, https://france.arcelormittal.com/news/2020/oct/arcelormittal-europe-produira-de-iacier-vert-a-partir-de-2020.aspx
  5. Climate Action in Europe, 2020, https://corporate.arcelormittal.com/sustainability/climate-action-in-europe
  6. https://corporate.arcelormittal.com/climate-action/decarbonisation-technologies/carbalyst-capturing-and-re-using-our-carbon-rich-waste-gases-to-make-valuable-chemical-products
  7. https://www.fo-arcelormittal-fos.fr/blog/c/0/i/51149720/fos-sur-mer-arcelormittal-mediterranee-se-lance-dans-l-acier-vert