On Tuesday 27 September 2022, Luxembourg's Ministry of the Economy and ArcelorMittal signed a memorandum of understanding (MoU) to allow the ArcelorMittal group's Luxembourg sites to embark on the path of carbon neutral steel production and increase capacity.
This agreement confirms the willingness of the Luxembourg government to make efforts to support these development projects through utilisation of available funding mechanisms.
Presentation of the projects
The first package of projects, with an estimated value of €100 million, will consist of a transformation of the Belval steel plant with a new electric arc furnace (EAF). This investment will improve energy efficiency and increase steel production capacity by almost 15% to 2.5 million tonnes of steel per year, thus establishing self-sufficiency in steel production capacity in Luxembourg to cover the needs of finished rolled products.
At a later stage, the residual carbon footprint will be addressed by a wave of new technological developments, such as replacing natural gas in the rolling mill reheating furnaces with alternative energy resources.
In a second phase, ArcelorMittal aims to make Bissen the first carbon-neutral site of ArcelorMittal Wire Solutions by investing in the modernisation of its wire drawing and galvanising lines through the use of state-of-the-art technology. Studies to confirm the feasibility of these projects have been launched and the decision to proceed will depend on the results. €30 million will be made in several stages over the next five years.
Finally, the R&D centre in Esch, which celebrates its 50th anniversary this year, has a key role to play in the development of production processes, products and applications for ArcelorMittal's plants in Luxembourg, in particular for the decarbonisation projects covered by the MoU. In this context, the group intends to relocate the current research centre, located in Esch-sur-Alzette, to the Belval site. This will consolidate and strengthen ArcelorMittal's R&D activities in Luxembourg and will promote close interaction with the ArcelorMittal Long Products sites, the University of Luxembourg and the Luxembourg Institute of Science and Technology (LIST), creating an innovation cluster that will benefit from this concentration of activities.
As part of the ArcelorMittal group's commitment to decarbonising its steelmaking activities, which has led to various announcements of large-scale projects in Germany, Belgium, Spain and France, supported by the public authorities of these countries, these projects aim to propel the Luxembourg steel industry and are on top of the investments mentioned in the LUX2025 Tripartite agreement as well as the recurring annual maintenance investments.
Minister of the Economy, Franz Fayot, said: "The Ministry of the Economy is pleased to be associated with the ambitious objectives of ArcelorMittal's zero CO2 emission roadmap in Luxembourg, which will contribute to the objectives that Europe has set itself to tackle the climate crisis. The investments planned through the various projects are in line with the government's priorities for climate transition and represent an important opportunity not only for the environment, but also to strengthen Luxembourg's reputation as a renowned industrial site at the forefront of innovation."
Vice Chairman of ArcelorMittal and Managing Director of ArcelorMittal Europe, Geert van Poelvoorde, said: "ArcelorMittal has taken the lead in assuming a global leadership role in decarbonising the steel industry. Our agreements with several European governments demonstrate the steps we are taking to decarbonise our operations and accelerate progress in the decade ahead. With today's announcement, ArcelorMittal Europe is moving forward with its goal of reducing CO2 emissions by 35% by 2030, and pursuing its ultimate goal of producing carbon-neutral steel. We are grateful to the Luxembourg government for its continued support and backing for our decarbonisation roadmap, without which our ambitious plans would not be possible."
CEO of ArcelorMittal Europe Long Products, Sanjay Samaddar, said: "ArcelorMittal's Luxembourg sites have a key role to play in the transformation of the Long Products business in Europe. Our products have long been at the forefront of innovation, quality and sustainability, and our mills were among the first to introduce XCarb© products from recycled and renewable sources, with a reduced carbon footprint. We are now embarking on the transformation of our production processes to continue our progress towards zero steel."
Finally, Technical Director of ArcelorMittal Europe Long Products, Roland Bastian, stressed: "25 years after the strategic replacement of the last blast furnaces with electric arc furnaces, ArcelorMittal Luxembourg is now taking another important step towards decarbonising its footprint, through energy efficiency and the adoption of alternatives to fossil fuels. In addition, the exciting new projects being launched today will also help ensure the competitiveness, attractiveness and future of our production sites in Luxembourg."