The European Investment Bank (EIB) Group announced today a €280 million loan granted to steel and mining company ArcelorMittal, aimed at supporting the company’s climate goals through reducions in the environmental footprint of its manufacturing facilities, steel products and technological solutions. The loan is backed by the European Fund for Strategic Investments’ (EFSI Investment Plan for Europe.
Steelmaking is one of the biggest emitters of CO2 globally, with total greenhouse gas emissions (GHG) from the sector accounting for between 7% and 9% of direct emissions from the global use of fossil fuels. Given steel’s heavy dependence on coal, it is also one of the most challenging sectors to decarbonize. While several initiatives have emerged recently to help address the impact of steel, most commercially viable alternatives are still at an early stage.
ArcelorMittal announced last year a commitment to achieve company-wide carbon neutrality by 2050, building on its goals to reduce emissions by 30% by 2030. The company has said that it is exploring multiple approaches to low-emissions steelmaking, including the use of hydrogen or circular carbon and carbon capture and storage processes.
The new funding will support the company’s research and development activities and capex in areas including circular economy and CO2 reduction, new rolling technologies for energy reduction, blast furnace decarbonization, and substrates and coatings for global energy transition applications, such as solar and windmills, among others.
Vice-President of ArcelorMittal and Head of Research and Development Greg Ludkovsky said:
“The role of our organisation, Global R&D, is to create the technological basis for ensuring ArcelorMittal’s long-term viability as the world’s leading steel and mining company. This funding will help Global R&D to further enable ArcelorMittal’s ambitions to reduce its environmental footprint in terms of its operations and its products. We will be able to expand our work to develop environmentally sustainable, high-added value, cost-effective and disruptive products and manufacturing processes.”
Late last year, EIB’s board of directors of the EIB Group Climate Bank Roadmap, which guides future climate action financing by the EIB and European Investment Fund (EIF), supporting €1 trillion of climate and environmental sustainability investments by 2030, and to align all financing activities with the principles and goals of the Paris climate agreement. In 2019, EIB decided to increase its level of climate and environment commitment, effectively transforming the group from being “an EU Bank supporting climate” into “The EU Climate Bank.”
EIB Vice-President Ambroise Fayolle said:
“The signing of this agreement between the EU bank and ArcelorMittal will support a major European player in the steel industry with an in-depth focus on higher value-added steel products. These investments will play a key role in ArcelorMittal’s carbon footprint reduction strategy and therefore contribute to the European Green Deal, aligned with the terms of the 2015 Paris Agreement on climate change.”