ArcelorMittal’s recent decision to pause its hydrogen-based green steel projects across Europe has raised alarm among climate advocates and renewable energy stakeholders. The steel giant cited unfavorable policy, energy, and market conditions, highlighting weaknesses in the EU’s carbon border adjustment mechanism (CBAM), which aims to protect European producers from less-regulated foreign competitors.
Setback for Green Steel in Europe
RenewableH2, a trade association, called the move a significant blow to Europe’s efforts to decarbonize its steel industry. “Renewable hydrogen and electricity are crucial for reducing emissions and maintaining industrial competitiveness,” the group said. The delay has put pressure on the incoming European Commission, which is set to unveil its Clean Industrial Deal within its first 100 days.
The commission’s vice-president for green transition, Teresa Ribera, will visit ArcelorMittal’s Ghent facility this week, alongside key EU and Belgian officials, signaling the EU’s commitment to resolving regulatory and market challenges. The firm has already received billions in state support across Germany, France, Spain, and Belgium for its planned transition to hydrogen-based steel production.
Calls for Policy Stability and Market Reform
Critics, including Climate Action Network Europe, argue that ArcelorMittal’s delay undermines the EU’s leadership in green industrial transformation and leaves workers and communities in uncertainty. Meanwhile, Hydrogen Europe CEO Jorgo Chatzimarkakis downplayed the delay, citing the challenges of scaling new industries and emphasizing the need for regulatory clarity.
Swedish competitor SSAB echoed the call for stronger EU policy support, advocating for robust carbon pricing, uniform near-zero emission standards, and the phased-out allocation of free emissions permits to drive decarbonization.
The unfolding situation underscores the critical role of policy stability and investment incentives in ensuring Europe’s green industrial transition, as the continent moves to decarbonize its heavy industries and retain its global competitiveness.