ArcelorMittal Germany is struggling to transition to low-emission steel production due to soaring electricity prices. Thomas Bünger, the CEO of ArcelorMittal Germany, stated that the high cost of electricity is the biggest hurdle in decarbonizing steel production. He mentioned that the ideal price for electricity should be between €50-55/MWh, similar to pre-energy crisis levels.
ArcelorMittal Germany Faces Challenges with Fluctuating Electricity Prices and Production Interruptions
The company faced a significant issue in December 2024. The Eisenhüttenstadt plant had temporary production interruptions when electricity prices spiked to €850/MWh. This price surge occurred during a period of high capacity utilization. The interruptions raised concerns about timely steel delivery. Fortunately, the company has enough orders to maintain full utilization for the first half of 2025. These challenges highlight the broader ArcelorMittal Germany challenges in navigating fluctuating electricity prices while maintaining production efficiency.
Transition to Electric Arc Furnaces (EAF)
The shift to decarbonized steel production requires moving from blast furnaces to electric arc furnaces (EAF). However, this change brings challenges. Without blast furnaces, the company will lose the ability to generate electricity from waste gases. This makes ArcelorMittal Germany dependent on fluctuating electricity prices. Bünger believes lowering electricity prices to pre-crisis levels would be a crucial first step.
Future Vision for 2030
Looking ahead, ArcelorMittal Germany sees challenges with direct reduced iron (DRI) steelmaking technologies. The company believes that clean hydrogen and carbon capture (CCUS) technologies will not be economically viable before 2030. ArcelorMittal plans to update its decarbonization forecasts once the political environment becomes more stable.
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