ArcelorMittal confirms suspension of plans for DRI plant in Dunkirk

The company cites the unprofitability of the investment, given the prices of gas and green hydrogen

ArcelorMittal has confirmed the cancellation of plans to build a direct reduced iron (DRI) plant and hydrogen facility in Dunkirk, France. This was announced by ArcelorMittal France CEO Alain Le Grix de la Salle during a hearing before the lower house of parliament’s finance committee, Kallanish reports.

The company had planned to build a DRI plant and two electric arc furnaces in Dunkirk with an initial investment of €1.8 billion. Last year, a €850 million financing agreement was signed with the French Agency for Energy Transition (ADEME).

However, the project was ultimately postponed due to limited predictability in international markets, insufficient protection against unfair imports, and delays in the implementation of CBAM.

ArcelorMittal has not yet received funding from ADEME. One of the conditions was that the DRI plant would operate in the long term using green or low-carbon hydrogen as soon as it became available. Initially, the facility could operate on natural gas.

De la Salle cited the unprofitability of investing in the DRI plant, given the prices of gas, electricity, and green hydrogen, as well as the lack of a viable short-term economic model to support the development of industrial hydrogen projects in France.

Despite this, the company plans to invest €1.2 billion in the first electric arc furnace in Dunkirk, which is scheduled to start operating in late 2028 or early 2029. The final decision will be made at the end of the summer.

As a reminder, ArcelorMittal recently announced that it was abandoning plans to convert two plants in Germany to carbon-neutral production due to the country’s high electricity costs.

As GMK Center reported earlier, ArcelorMittal Poland believes that steelmakers are unable to bear the costs of decarbonization on their own. One of the obstacles to the implementation of these plans is the price of energy.