Electricity cost hinders transition to green steel production – ArcelorMittal Germany

High electricity prices in Germany are the main obstacle to the transition to low-emission steel production. This opinion was expressed by Thomas Bünger, CEO of ArcelorMittal Germany, Kallanish reports.

In an interview with RBB, he said that the “yardstick” would be a price of €50-55/MWh, the same as before the energy crisis.

Bünger recalled the temporary interruption of production at the company’s Eisenhüttenstadt plant in December 2024. At that time, the spot price of electricity soared to €850/MWh. Capacity utilization at the time was high, so this hurt the production process. The CEO of ArcelorMittal Germany also noted that such interruptions put in question the timely delivery to customers. However, the company currently has enough orders to maintain full utilization in the first half of this year.

According to Bünger, decarbonization requires a shift in steel production from blast furnaces to electric arc furnaces. However, the absence of blast furnaces means the loss of electricity generated by the plant from waste gases, and EAF will make the company dependent on volatile market prices.

The CEO of ArcelorMittal Germany believes that a good initial step would be to reduce electricity prices to 2023 levels, and the company expects the new German government to take swift action in this regard.

As GMK Center reported earlier, the transition to direct reduced iron (DRI) steelmaking technologies based on clean hydrogen and carbon capture, utilization and storage (CCUS) is unlikely to be economically feasible before 2030. This is stated in ArcelorMittal’s 2024 sustainability report.
The company intends to publish revised decarbonization forecasts in a more stable political environment.