The practical move to populate Europe with wind towers, solar plants, and electric vehicles to cut CO2 emissions hinges on decarbonizing the core material: steel. ArcelorMittal has set an ambitious course to transform its Asturias facilities and secure steady green steel production. The first phase, valued at 1,000 million euros, was announced in Gijón about a year and a half ago by the Mittal family and Spanish Prime Minister Pedro Sánchez, yet the funding has not been finalized. The project has not yet passed the multinational investment committee in Luxembourg, and new uncertainties continue to surface.
European aid
The initial phase envisions directly replacing one blast furnace in Gijón with a direct reduction of iron ore (DRI) facility powered by green hydrogen, paired with a hybrid electric arc furnace fed by pre-reduced iron, scrap, and renewables. The planned 1,000 million euro investment was set to receive public support amounting to about half of the cost. The Spanish government signaled it would secure this funding through European funds, a plan endorsed after a Davos meeting between Lakshmi Mittal and Pedro Sánchez last May. Yet the aid has not been confirmed. The funding framework requires explicit EU permission to avoid state aid conflicts, along with hearings and reports from other member states and affected companies to prevent market distortion before authorization. A policy official from the EU’s General Directorate for Growth Hydrogen Economy noted that regulatory changes have added complexity to the process. For now, there is no clear sign that ArcelorMittal’s request will be approved.
PERTE of decarbonization
The Spanish government intends to channel most of the aid for Asturias through PERTE, the strategic project for economic recovery and transformation, aimed at industrial decarbonization. Yet Raúl Blanco, the Secretary General for Industry and SMEs, acknowledged in Oviedo that ArcelorMittal’s move is not yet cemented. He indicated that before December 31 the Council of Ministers would review the PERTE’s industrial decarbonization report, potentially listing the ArcelorMittal project. Galo Gutiérrez, the general manager for Industry and SMEs, later announced a PERTE total of 2,900 million euros—1,200 million euros in grants and 1,700 million in loans. Ministry sources said work is ongoing to finalize this support. The Alliance for the Competitiveness of Spanish Industry, which brings together steel, automotive, chemical, paper, cement, refining, and mineral sectors, pressed for PERTE approval and for the budget to align with project timelines extending from 2026 toward 2028.
investment committee
ArcelorMittal’s decarbonization plan in Asturias must keep to a clear timetable, as delays in support could force changes. In September 2024, blast furnace A in Gijón, temporarily shut due to weakening steel demand, approached its end of life, with the company aiming for the new electric steel mill to be operational by January 2025 at the latest. Any further delay risks unmet orders and customers turning to other suppliers. Environmental work on the new mill continues, and a team of more than twenty professionals—mostly engineers—has been assembled to pilot the transformation of Gijón’s mills. The project has not yet received final approval because it has not cleared the investment committee in Luxembourg.
The Spanish management plans to negotiate with workers’ representatives to reorganize the workforce for the automated facilities. Regulation could affect up to 900 jobs, while ArcelorMittal supports about 5,000 companies in Asturias. A competitiveness plan for the long products segment foresees a net loss of 113 jobs by 2025 due to the electric arc furnace commissioning and modernization efforts. This initial adjustment does not include potential redundancies in facilities slated for decarbonization, such as blast furnace A or sinter where iron ore is prepared.
technological challenge
ArcelorMittal operates direct iron ore reduction plants and electric arc furnaces, but using renewable hydrogen as a fuel remains a work in progress. The company successfully tested a partial substitution of natural gas with green hydrogen for direct reduction in Québec, Canada, with a small share of substitution around 6 percent. A substantial journey still lies ahead.
hydrogen source
Securing green fuel at a competitive price for Asturias’ steel industry remains a central puzzle. ArcelorMittal participates in the HyDeal Spain alliance with Enagás, Fertiberia, Soladvent, and DH2 Energy, aiming to supply renewable gas to Asturias from 2025. The plan envisions a network of solar parks in León and Zamora that would initially feed nearby electrolyzers for green hydrogen production. Renewable gas would travel through a new pipeline running parallel to the Via de la Plata gas line to reach the Gijón works. Procurement is slated to begin in three years, but the project remains unfinalized, with land acquisitions and permits still pending. Photovoltaic installations require about two years to complete, according to UNEF, while the government intends to speed processing and the European Commission may ease environmental restrictions. The HyDeal consortium notes that electrolyzers located beside solar parks would reduce grid connection needs, though the overall project depends on panel and electrolyzer availability. HyDeal Spain envisions 9.5 gigawatts of installed solar capacity, roughly 19 million panels. The same scale of electrolyzers is required, with a potential Asturias location for a massive electrolyzer factory. Hydrogen deliveries to ArcelorMittal could begin in 2025, but if supplies lag, natural gas could be used temporarily, with price pressures a constant concern. HyDeal partners meet regularly to assess progress, and funding details remain in flux.
industrial law
Against the backdrop of ongoing uncertainty, the government announced an industrial law proposing new obligations for factories receiving aid to maintain activity and employment. Industry groups warned that the proposal could shift policy without full consultation. The steel employers’ association noted that the government’s draft legislation was released as a presentation, not as a full text, raising concerns about how the changes would be implemented and how they would impact ArcelorMittal and its suppliers.