Takeaways

• ArcelorMittal will invest €1.3 billion ($1.5 billion) to build an electric arc furnace in Dunkirk, France.
• The project signals renewed momentum for low-carbon steelmaking after improved EU policy support, including tariffs and CBAM.
• The new facility is expected to cut CO2 emissions significantly compared to traditional blast furnaces.

Steel and mining giant ArcelorMittal has announced plans to invest €1.3 billion ($1.5 billion) in a new electric arc furnace (EAF) in Dunkirk, marking a major step forward in its low-carbon steelmaking strategy in France.

The 2-million-ton electric arc furnace is scheduled to begin operations in 2029. Once operational, the facility is expected to produce steel with nearly three times less CO2 emissions than a traditional blast furnace. The company estimates emissions at around 0.6 tons of CO2 per ton of steel, using a mix of scrap, hot briquetted iron (HBI), direct reduced iron (DRI), and hot metal.

Steelmaking remains one of the largest industrial sources of greenhouse gas emissions globally, accounting for roughly 7% to 9% of direct emissions from fossil fuel use. Decarbonization of the sector is widely seen as critical to meeting climate targets, but it has also proven challenging due to high costs and technological barriers.

Read More: Tata, JCB Sign Agreement for Supply of Low Carbon Steel

The announcement marks a shift in direction for ArcelorMittal. In 2024, the company had signaled it would delay investments in low-carbon steelmaking projects due to policy uncertainty in Europe. However, improved market and regulatory conditions have now made the Dunkirk project financially viable.

CEO Geert van Poelvoorde credited recent European policy developments, including trade tariffs designed to limit unfair imports into the EU and the introduction of the Carbon Border Adjustment Mechanism (CBAM). He said these measures help create a more level playing field for European producers.

CBAM is aimed at preventing carbon leakage by placing a carbon price on certain imported goods, including steel, aligning them with EU climate standards. According to van Poelvoorde, this regulatory clarity has strengthened the business case for investing in decarbonization within Europe.

Electric arc furnaces differ significantly from traditional blast furnaces. Instead of relying on coal to generate the heat required to melt iron ore, EAFs use electric currents. This allows for lower emissions, particularly when powered by cleaner electricity sources. ArcelorMittal’s DRI pathway further reduces emissions by using direct reduced iron produced with natural gas as an input into the EAF process.

The Dunkirk project will also receive support through France’s Energy Efficiency Certificates (CEE) scheme, which promotes energy savings and CO2 reduction.

ArcelorMittal has committed to achieving company-wide net zero emissions by 2050. Beyond electric arc furnace technology, the company is exploring other low-emissions steelmaking pathways, including hydrogen-based production, circular carbon solutions, and carbon capture and storage.

“The decision to proceed with building an EAF in ArcelorMittal Dunkirk, to produce low-carbon emissions steel at scale for our customers, has been made possible because we now have the conditions in place to make this project a success,” van Poelvoorde said. “We will now focus on steering the Dunkirk EAF project to completion and commercial success.”

Also Read: Malaysia Charts Steel Industry Roadmap 2035 for Low-Carbon Future

The investment highlights how policy certainty and supportive market frameworks are becoming central to accelerating decarbonization in heavy industry.

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Source: ESGtoday