By Pierre Bertrand
The European Commission has given its approval for state aid measures amounting to a total of €2.85 billion ($3.19 billion) to be allocated towards decarbonizing the operations of Thyssenkrupp and ArcelorMittal.
Thyssenkrupp’s Steel Europe Business
Thyssenkrupp’s Steel Europe business will receive a grant of up to €550 million from the German government. The funds will be used for the construction and installation of a direct reduction plant and two melting units in Duisburg, replacing an existing blast furnace. The goal is to gradually phase out the use of natural gas, with the plant being fully powered by renewable hydrogen by 2037. The initial operation of these facilities is expected to commence in 2026.
Furthermore, a conditional payment mechanism of up to €1.45 billion has been approved for Thyssenkrupp. This mechanism will cover the additional costs associated with procuring and utilizing renewable hydrogen during the first decade of the new plant’s operation.
ArcelorMittal’s Project in Dunkirk
ArcelorMittal will receive a French measure of €850 million to support its decarbonization efforts. The funds will be utilized for the construction of a direct reduction plant and two electric arc furnaces at its Dunkirk location. These new facilities will replace two of the existing blast furnaces and two basic oxygen furnaces at the site. Similar to the German project, the use of natural gas at Dunkirk will also be phased out, being replaced by renewable or low-carbon hydrogen, biogas, and electricity.
The funding for ArcelorMittal’s project will be provided in four installments during the construction period, which is projected to take place between 2023 and 2026. It is expected that the combined facilities will be fully operational by 2026.
These state aid measures reflect the commitment of Thyssenkrupp and ArcelorMittal to transition towards more sustainable and carbon-neutral operations.