On Monday, ArcelorMittal, the global steel producer, announced a deal with the French government to obtain state subsidies aimed at accelerating its decarbonization facilities. The plan focuses on the Dunkirk site and mirrors a prior project paused in northern France, with parallel efforts noted in Asturias and, according to ArcelorMittal, in Germany and Belgium.
The signing came after a preliminary step in which ArcelorMittal and EDF reached a letter of intent for a future energy supply arrangement. The agreement would power the Dunkerque plant from the nearby Gravelines nuclear facility, one of the largest in France and the second-largest in Europe, which remains under state influence. ArcelorMittal described the anticipated electricity supply as essential for the investment, with reforms in the French electricity market serving as a critical backdrop for the project.
Energy costs emerged as the main challenge keeping the project in a wait-and-see phase, tied to the pricing system for France’s electro-intensive industries. France operates a special tariff to support heavy industry, yet the daily wholesale electricity price has risen in recent years. Market indicators show energy is cheaper in Spain than in France, a factor influencing competitiveness and investment choices.
The plan drew remarks from Bruno Le Maire, France’s minister of economy, finance, and industrial sovereignty, who traveled to Dunkirk to participate in the signing. He called the agreement a climate and economic milestone for France, noting that several European facilities were vying for the investment and that Dunkirk stood among the leading candidates. President Emmanuel Macron described the deal as historic, emphasizing its significance at the European level.
The Dunkerque project envisions outfitting the plant with two electric furnaces and replacing one of the two blast furnaces with a direct reduction furnace (DRI). This approach aligns with similar commitments made for the Gijón facility in Spain, which is currently on hold pending further funding. In Spain, government aid exceeding 450 million euros has already been approved for the related DRI initiative, reflecting a broader strategy to decarbonize steel production without sacrificing output.
The DRI technology represents a newer pathway for green steelmaking, moving away from traditional iron ore reduction through electrical methods alone. The DRI process focuses on transforming ore with pre-reduced material and scrap, enabling lower emissions while maintaining scale. This shift is seen as essential to preserving the long-standing role of large steel mills in Asturias, ensuring decarbonization without sacrificing competitiveness or production capacity.
The agreement with the French government was executed in cooperation with Ademe, the French Environment and Energy Management Agency. Through this arrangement, the state is expected to provide 850 million euros in aid, amounting to roughly 44 percent of the 1.8 billion euro investment. In Gijón, the related plan carries a total investment of 1 billion euros, with 450 million euros in subsidies representing about 45 percent of the total. The hybrid electric furnace project in Gijón is also benefiting from additional subsidies in related programs.
The DRI project for Asturias was first announced in July 2021 in Gijón by the Mittal family, who control ArcelorMittal, in collaboration with Spain’s government leadership. The Dunkirk project followed seven months later, in February 2022, with permission to access European Union public aid granted in February 2023. ArcelorMittal was the first company to secure this approval, with Dunkirk following five months later in July. The company anticipates bringing the new production facility online in 2027, about a year ahead of the timeline set by NextGenerationEU funds used to subsidize the Gijón project. Dunkirk endured a three-week strike in December during its development cycle.
Gimena Llamedo: “We Are Confident Investments in Asturias Will Materialize”
Christian Garcia, Avilés
The vice president of Asturias, Gimena Llamedo, stated that the regional government maintains ongoing dialogue with Madrid about ArcelorMittal’s decarbonization plans. When asked about the decision to pause the DRI project in Gijón, Llamedo expressed confidence that investments would proceed to decarbonize the Asturian facility and emphasized the importance of continuing discussions to keep progress on track.
Carlos Paniceres: “Energy Prices Must Be Competitive”
Oriol Lopez, Oviedo
Carlos Paniceres, president of the Oviedo Chamber of Commerce, warned that delaying ArcelorMittal’s green transition would be a heavy blow for Asturias. He stressed that energy costs are central to competitiveness and called for greater availability and affordability of renewable energy in Asturias. Paniceres urged policymakers to provide tools that ensure the region can compete effectively on energy economics.
Note to readers: All statements and figures referenced reflect public announcements and government documents from the cited dates. Attribution: ArcelorMittal press release; European Union subsidy approvals; statements from regional and national officials.