(Adding the DRI plant in Bremen in paragraphs 7 and 9)
FRANKFURT (Reuters) – ArcelorMittal is seeking partners and public funding to curb carbon emissions from steelmaking at its German operation where plans for alternative technologies are far ahead, said the head of Europe’s largest steel producer.
European steelmakers are under pressure to reduce carbon emissions while maintaining profitability in a market where there is fierce competition, particularly from China, while pollution permit fees are soaring higher.[L8N2L94CD]
“We are looking for partners from the energy sector to generate renewable energy,” Geert Van Poelvoorde, the new chief executive of ArcelorMittal Europe, told Reuters in an interview.
“We want to replace carbon and increase the use of scrap metal.”
The company estimates it will cost between 1 and 1.5 billion euros ($ 1.18-1.77 billion) to transform the Bremen and Eisenhuettenstadt plants, said Van Poelvoorde.
The company will close blast furnaces at each of the two factories and build electric arc furnaces for scrap smelting.
It will build iron ore direct reduction (DRI) plants in Bremen and Eisenhuettenstadt, which can run on gas as a transition fuel initially, and later on hydrogen, which is considered carbon neutral when it comes from renewable electricity.
The DRI process cuts CO2 versus the integrated blast furnace route by two-thirds.
The Bremen and Eisenhuettenstadt plans “have the potential to save five million tonnes of CO2 per year. That’s important, “said Van Poelvoorde.
Separately, ArcelorMittal’s so-called “smart carbon” will use carbon recycled from bioenergy, green electricity, and carbon capture and use.
Meanwhile in France, the French Finance Minister said during a visit to the Fos-sur-Mer ArcelorMittal plant in southern France that ArcelorMittal is investing 63 million euros to cut the plant’s carbon emissions, which will include a 15 million euro subsidy from the French state.
Van Poelvoorde said the positive results of applying for subsidies of up to 60% of investment at the German and EU levels were critical to Germany’s plans which will be completed possibly early next year and will be implemented between 2025 and 2030.
The EU needs to impose border protection tariffs on imported steel from countries with heavy carbon loads, he said.
Consumers should also be prepared to accept higher steel costs, around 60%, for cleaner manufacturing processes, he said.
($ 1 = 0.8480 euros)
Reporting by Tom Kaeckenhoff, Vera Eckert; additional reporting by Thomas Leigh, editing by Maria Sheahan and Elaine Hardcastle