UPDATE - EC okays Spain's state aid for ArcelorMittal as well

The same day it cleared an ArcelorMittal SA (AMS:MT) decarbonisation demo in Germany, the European Commission (EC) also approved EUR 460 million (USD 493m) in state aid for the steel producer to implement a green hydrogen pilot in Spain.

More specifically, the EC has authorised the provision by the Spanish government of a direct grant of the aforementioned sum to support a EUR-1-billion project aimed at partially decarbonising ArcelorMittal’s steel production in Gijon. There, the company operates two blast furnaces producing liquid hot metal from a mixture of iron ore, coke and limestone. These processes are currently running on natural gas.

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ArcelorMittal’s plan is to build a direct reduced iron (DRI) plant with a new electric arc furnace (EAF) in order to produce some 2.3 million tonnes of DRI per year using renewable hydrogen. The facility will gradually phase out the use of natural gas in the steel production processes and ultimately move to green hydrogen consumption. The start of operation is scheduled for the end of 2025.

This project is expected to reduce carbon dioxide (CO2) emissions by 4.8 million tonnes within the next five years, ArcelorMittal estimates.

Similar to its conclusions in relation to ArcelorMittal’s green steel pilot in Germany, the EC has determined that supporting the Spanish project will have an “incentive effect” and limited impact on competition and trade within the EU.

(EUR 1.0 = USD 1.073)