ArcelorMittal planning green steel for Europe, blast furnaces for India: Report

A new report finds that the Luxembourg-based company is building new coal-powered blast furnaces in India in a joint venture with Nippon Steel of Japan, while producing cleaner steel in Europe

The development plans of the world’s second largest and Luxembourg-based steel manufacturing corporation, ArcelorMittal, revealed the use of very different technology and emissions approaches being taken in India and Europe by the company. A new report by the Institute of Energy Economics and Financial Analysis (IEEFA) found that ArcelorMittal’s plans for more coal-based steelmaking in India contrasts markedly with its developments in Europe and Canada, where the company is planning a transition away from blast furnaces.

The report found that despite the company’s low-carbon development plans in the developed world, ArcelorMittal is developing more blast furnaces in India through its joint venture with Nippon Steel of Japan — ArcelorMittal Nippon Steel India (AM/NS India).

AM/NS India has now begun construction of two new blast furnaces at Hazira, Gujarat, is planning a further expansion of capacity of 5 million tonnes per annum (Mtpa) as well as new integrated steel plants at Kendrapara (24Mtpa) and Paradip (6Mtpa) in the state of Odisha. The steelmaking technology being planned for the very large Odisha expansions has not been disclosed.

The report said that the blast furnace expansions under construction at Hazira totalling 6Mtpa of capacity will increase carbon emissions by approximately 2 tonnes per tonne of crude steel produced — that is, around 12 million tonnes of additional carbon dioxide equivalent emissions if running at full capacity. The further expansions being planned for Odisha would add much more if they are also based on blast furnaces, the report warned.

Simon Nicholas, IEEFA’s Lead Steel Analyst, said, “ArcelorMittal, the world’s second-largest steelmaker, appears to be planning a two-speed decarbonisation, with hydrogen-ready, direct reduced iron (DRI) technology to be installed overwhelmingly in developed nations while building more coal-consuming blast furnaces in the developing Global South.”

A 2021 report by think tank E3G and the U.S. Department of Energy’s Pacific Northwest National Laboratory found that blast furnaces without carbon capture utilisation and storage (CCUS) will need to be phased out by 2045 for the global steel sector to be on an orderly 1.5°C pathway and no more new blast furnaces without CCUS should come online after 2025 to avoid stranded assets. AM/NS India’s expansion plan will see two new blast furnaces—without CCUS—brought online in 2025 and 2026, the report by IEEFA said.

IEEFA Steel Analyst Soroush Basirat said, “There are no full-scale CCUS facilities for blast furnace-based steel making operational anywhere in the world and only a few, small pilot projects underway or planned. In addition to a very limited track record in steel, CCUS has had a problematic and disappointing history in other sectors like power generation and gas production.”

“We’ve observed an acceleration in hydrogen-ready DRI technology rollout recently that is leaving CCUS technology even further behind,” added Nicholas.

The report mentioned the recent benchmark assessments by Climate Action 100+, which found that ArcelorMittal currently fails to meet a number of criteria. The company has no short-term (2025) greenhouse gas emissions reduction target, its medium-term (2026–2035) target is not aligned with the goal of limiting global warming to 1.5°C and it has failed to decarbonise its capital expenditures.

Major international steelmakers like ArcelorMittal are keen to enter the Indian market because it is the key steel growth market globally, with a planned doubling in capacity this decade alone. 

While Europe is already accelerating its shift away from reliance on coal-based steelmaking by developing new hydrogen-based steelmaking plants, including plans by ArcelorMittal itself, what allows the same corporation to practise double standards in India? Which policies enable such ventures to thrive? How can those policies be changed to ensure healthy supply while transitioning to a cleaner production process?

These questions must be answered because efforts to bring the global steel sector towards net-zero emissions will not be achieved if India relies on new coal-based steelmaking to meet its very high forecast demand growth. 

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