IEEFA questions ArcelorMittal’s coal-based blast furnace capacities in India

In its response, ArcelorMittal said the journey to net zero for the steel industry will require more than one technology route, which is why the steelmaker is progressing with two technology routes. (Representative image)

Analysts with Institute for Energy Economics and Financial Analysis (IEEFA) have questioned ArcelorMittal’s technology and emissions approaches in India, which they say are different from that in Europe, in their latest report on the company.

Under fire, is ArcelorMittal’s Rs 60,000-crore expansion plan at Hazira in Gujarat in partnership with Japan's Nippon Steel, where work commenced in October. Once complete, the expansion will take Hazira’s production capacity to 15 million tonne per annum (MTPA) from the current 9 MTPA.

In a report titled "ArcelorMittal: Green Steel for Europe, Blast Furnaces for India", the agency has questioned how the steelmaker intends to reach Net Zero by 2050, as the company builds new coal-powered blast furnaces in India in a joint venture with Nippon Steel.

“ArcelorMittal, the world’s second-largest steelmaker, appears to be planning a two-speed decarbonisation, with hydrogen-ready, direct reduced iron (DRI) technology to be installed overwhelmingly in developed nations while building more coal-consuming blast furnaces in the developing Global South,” said Simon Nicholas, IEEFA’s Lead Steel Analyst.

The report further added, investors should be asking questions that challenge ArcelorMittal about its Indian expansion, the technology choices being made and how that aligns with the company’s 2050 net zero emissions target.  IEEFA in its press statement, also pointed out, signatories to the Climate Action 100+ initiative make up almost half of ArcelorMittal’s top 20 shareholders — including Amundi, BlackRock, Invesco, AllianceBernstein, DWS Investment and State Street Global Advisors.

The report highlighted the construction of two new blast furnaces at Hazira, and said the blast furnace expansions under construction at Hazira totalling 6 MTPA of capacity will increase carbon emissions to around 12 million tonnes of additional carbon dioxide equivalent emissions if running at full capacity.

In an emailed response, ArcelorMittal said, “We have been very clear about the fact that the journey to net zero for the steel industry will require more than one technology route.  That is why we are progressing two technology routes – one utilizing green hydrogen and the other carbon capture utilization and storage – and developing a third, direct electrolysis.”

ArcelorMittal also said, the India joint venture AM/NS India (the joint venture between ArcelorMittal and Nippon Steel) is working on a 2030 emissions reduction target and will release details in due.

On IEFFA’s comments on the  blast-furnace based expansion in India, Arcelor Mittal said, “The new blast furnaces will be best available technology with the potential to add on carbon capture and storage in the future.  There is also the potential to use hydrogen in the blast furnace, which also results in a reasonable decrease in emissions.  Furthermore AM/NS India also has DRI-based capacity, which it can convert to green hydrogen as and when it becomes economically available.”