Lack of Supportive Policy Hindering Green Transition Investment
ArcelorMittal’s executive chairman, Lakshmi Mittal, has emphasized the need for urgent action to support the green transition of Europe’s steel industry. He pointed out that there is currently a lack of clear and supportive policies that could activate significant investments in green technologies. To address this, Mittal advocates for immediate trade measures and adjustments to the Carbon Border Adjustment Mechanism (CBAM), which he believes are critical priorities.
Import Issues Must Be Addressed First
Mittal stresses that imports need to be the primary focus. He pointed out that intervention is necessary to better protect European steel, similar to how the steel industries in the US and Brazil are treated as strategic sectors. Emergency trade measures would send a strong signal that Europe is taking action to safeguard its steel industry, he stated in an interview with Financial Times.
Challenges of Fair Trade and CBAM Design
Mittal also highlighted the challenges of fair trade, particularly as Europe is the only major market imposing carbon costs. He argued that trade could be free but not necessarily fair, as Europe’s competitiveness in international manufacturing is being undermined by countries that are not decarbonising at the same pace. He further criticized the current design of the CBAM, stating that it fails to prevent steel imports from countries that circumvent climate protections by selling “clean” steel to Europe while exporting high-emission steel to other markets.
The Need for Strategic Decision-Making in Europe
Mittal concluded that Europe must decide whether it wants to produce steel domestically or rely on imports, which may carry a higher carbon footprint. ArcelorMittal has been unable to make final investment decisions on replacing blast furnaces with low-carbon technologies due to the lack of a supportive policy environment.
The Time to Act is Now
In conclusion, Mittal acknowledged the political and mechanical challenges of implementing these changes but urged that the time to act is now, especially with the new leadership in Brussels and the development of the clean industrial deal and steel and metals action plan. The European Commission’s new industrial chief, Stéphane Séjourné, has also reiterated the commitment to examining ways to limit steel imports as part of the EU’s broader decarbonisation strategy.
