ArcelorMittal postpones investment in DRI plant in Gijon

ArcelorMittal has announced that it has postponed the final investment decision on a 2.3 million tonnes per annum hydrogen-based direct reduction plant in its Gijon cluster (Spain). This was reported by S&P Global.

The company cited the unfavorable political, market and energy situation, as well as the slow development of green hydrogen.

The statement came a day after it became known that the company is waiting for the EU to act before making final investment decisions on decarbonizing its European assets.

ArcelorMittal did not say when a final decision on the Spanish plant might be made. Among the reasons for the delay, the company cited shortcomings in the European CBAM, noting the lack of a clear domestic regulatory framework for green hydrogen and the slow development of this technology.

In April of this year, the Spanish government approved €450 million in financing from the country’s recovery and resilience funds for ArcelorMittal’s low-carbon steel project in Gijón, which includes an integrated plan for a cluster of four plants. The total investment in Gijón is about €1 billion, with the bulk earmarked for a DRI plant that will replace one of the existing blast furnaces and power a new EAF. The use of direct reduced iron was also planned for the company’s other electric arc furnace in Sestao.

ArcelorMittal announced that it will continue engineering work and analysis, but this will not affect the construction of new EAFs at both sites.

The company recalled that in May this year it started construction of an electric arc furnace at its Gijon facility with a capacity of 1.1 million tons. In addition, efforts to increase production to 1.6 million tons by 2026 at the Sestao plant are progressing well.

The steel group emphasized that it remains committed to decarbonization, but expects more clarity on regulation in 2025. ArcelorMittal hopes that new initiatives will emerge to support the acceleration of the transition. The Green Deal industrial plan and the Steel and Metals Action Plan will be important, as well as the legislation that will follow from these plans and regulations that will stimulate demand.

Earlier, ArcelorMittal said it was postponing its planned green investments in France, citing regulatory uncertainty in the bloc.