Germany to provide €1.3 billion in subsidies for decarbonization of ArcelorMittal

Germany’s Federal Ministry for the Economic Affairs and Climate Change has announced its intention to provide €1.3 billion in subsidies for the decarbonization of ArcelorMittal’s German steelmaking operations. This was announced by German Economy Minister Robert Habeck during a visit to the company’s plant in Bremen, Kallanish reports.

According to Robert Habeck, this project is still subject to approval by the European Commission.

ArcelorMittal’s German subsidiary intends to replace two blast furnaces at its plants in Bremen and Eisenhüttenstadt with electric arc furnaces. This project is estimated at €2.5 billion in total.

«This news from Berlin encourages us to continue preparations for the transformation of the two plants. Over the next 12 months, we will be carrying out engineering work on the project,» said Thomas Bünger, CEO of ArcelorMittal Bremen and Eisenhüttenstadt.

The financial support, albeit preliminary, gives ArcelorMittal confidence that the company can count on government assistance to be provided to other German steelmakers with green ambitions. Salzgitter, Thyssenkrupp Steel, Saarland Dillinger, and Saarstahl have already received guarantees of subsidies for their respective transition projects.

As GMK Center reported earlier, at the end of 2023, the German government coalition reached an agreement on the federal budget for 2024 and also reduced the expenditures of the climate fund. The budget for next year will be reduced by €17 billion by cutting federal grants, environmental subsidies and certain expenses in a number of ministries. In particular, the expenditures of the Climate and Transformation Fund (KTF), which is not part of the regular budget, will be reduced by €12 billion in 2024 and by €45 billion by 2027.

The German steel association WV Stahl commented on the situation, noting that the transition industry needs legal and financial certainty, planning security for those companies that are ready to invest billions in new and transformational technologies.