The president of ArcelorMittal Spain, Jose Manuel Arias, pointed out yesterday that the company has to “read the decree and the conditions it establishes” before adopting the final decision: “We have three months to present the documentation and accept the subsidy to carry out the project,” he declared in Avilés. “The decarbonization project aims” to generate the capacity to manufacture green steel “, but the investment, he warned, also” must be economically sustainable and viable “.
To meet this condition, the company is “immersed” in “joint work with the national government to see how we can ensure that this project is sustainable, given the volatility we have in energy prices, and what kind of mechanisms we can activate to to ensure that the parameters we had in the project can be maintained. As soon as this is defined, it will be time to go ahead with the project,” he added.
Government and Principality. For his part, the general secretary of the Ministry of Industry, the Gijon Francis White, stated, before meeting with the management of the multinational, that “the aid has been approved and now there is a process in which it is necessary to request and accept it. But the important thing is that the process that corresponded to the State has ended and the funds are available to help the decarbonisation of the integrated steel industry in Spain, to reduce emissions and to continue to have a green steel industry, and that all the rest of the downstream activity develops”. “The foundations have been laid for this to be possible, and we must continue working,” he added.
According to Blanco, “we all know that right now the energy market is very stressed and that it is an added difficulty because there are many oscillations, but I am confident that in these three months, also with the help of the Spanish Government, we can work with ArcelorMittal so that all these uncertainties disappear and this project can be born, which is fundamental and strategic for Asturias and for Spain, because we have many sectors, such as automobiles and construction, that also depend on this, and because it will also be a huge boost for generation and hydrogen distribution with a company like ArcelorMittal”.
For his part, the Minister of Industry of the Principality, Enrique Fernandezwelcomed the “good news”, which will allow, he said, “Asturias to be one of the first regions in the world to manufacture green steel and to make it with the fuel of the future”.
Project. The subsidy granted is the one agreed by the company and the Government of Spain in 2021 (although the figure of 460 million was later considered) and that a month and a half ago (on February 17) obtained the mandatory authorization from the European Commission after an examination thorough to rule out that they could contravene the principles of free market and restrict competition.
The Ministry of Industry yesterday justified the direct granting of aid and without competitive concurrence due to its “unique character”, since “the use of hydrogen from renewable sources on an industrial scale is non-existent, with no precedents in Spain” and since “there is only one candidate company to do it on a large scale”.
The 450 million have been granted under the PERTE (Strategic Project for Economic Recovery and Transformation) for industrial decarbonization, endowed with 3,100 million, and which is nourished by European Next Generation funds.
The public resources granted to ArcelorMittal are fully allocated to the future iron ore direct reduction furnace (DRI) with which it intends to replace the current blast furnace A in Gijón by the end of 2025, according to the initial schedule.
This blast furnace is one of the ones that the company has and that is currently stopped after the fire that took place on the 22nd.
The DRI furnace is one of the two major actions undertaken by Arcelor at its Veriña factory to reduce and tend to eliminate CO2 emissions, which is a condition to guarantee the future of the steel industry in Asturias in compliance with the objectives and requirements communities on climate change. The European Council and Parliament agreed on December 18 to start the process of progressive reduction of free CO2 emission rights granted to energy-intensive industry in 2026 until their final abolition in 2034.
Of the two plants announced for the Gijon factory, DRI’s is the one with the slowest processing. The other, the new electric arc furnace that will replace the current Veriña steelworks, has just received all the environmental authorizations. This plant, which has already obtained public aid from other programs, such as those of the Institute for Energy Diversification and Saving (IDAE), will be a hybrid furnace because it will be able to use scrap metal as raw material -like other similar facilities- and also the pre-reduced iron that the DRI will produce.
The approval of public aid for 450 million was vital for ArcelorMittal to undertake its announced billion-dollar investment, although its final approval by the multinational is also conditional on reaching a social agreement with the unions – decarbonization, which will entail greater automation processes, will entail the loss of close to 1,000 of the 4,900 jobs in the steel head of Gijón and Avilés – already conditioning factors such as the cost of energy.
ArcelorMittal has participated since 2022 in the HyDeal consortium, which will produce hydrogen in Castilla y León through electrolysis with photovoltaic solar energy to supply large-scale industry in Asturias. However, ArcelorMittal plans to continue using natural gas in a first stage until the supply of hydrogen is assured in sufficient volumes and at a competitive price.
“Our intention is clear: to repair the blast furnace,” says José Manuel Arias
“Our intention is clear: to carry out the repair” of the blast furnace that was damaged in Veriña on the 22nd. The president of ArcelorMittal in Spain, José Manuel Arias, expressed this emphatically yesterday, pointing out that there are still several weeks left until the know the exact extent of the damage and the reform project can be prepared.
Arias made these statements during a meeting with the General Secretary for Industry, Francisco Blanco, from Asturias, and which was also attended by other members of the company’s management committee, such as Stephen Van CampeDirector of Headquarters Operations, and Paul AvelloDirector of Finishing Operations.
The General Secretary for Industry explained that he wanted to take advantage of these days in Asturias to “learn first-hand what the situation is after the blast furnace fire.” And he expressed the “tranquility” that supposes for the Government of the nation that “there is a clear will on the part of ArcelorMittal to accurately diagnose the scope of the fault, the dimensions of the repair and carry out the project, because there is a will to undertake the reform “. Also reiterated “all the support of the Government and our commitment to the project” of the multinational.
The president in Spain of the steel multinational pointed out that the company’s decarbonization plan for Asturias and the decision adopted on whether or not to repair the blast furnace “is completely independent” and stressed that the intention is to address the repair. “In a few days we will begin to open the shell, and we must remove the load that is in the furnace. It will take a couple of weeks at least, to access and see how the refractory is. Depending on what is seen , we will define the type of repair that we have to carry out,” said José Manuel Arias.
Of course, he insisted that “we are clear that we must make a repair that allows us to start the oven in safe and sustainable conditions. That is why we want to be prudent. We must go in, analyze and conscientiously see what the solution is”.
Regarding the announcements of calls for mobilizations, Arias asked that “there is an announcement date, but there are many days until then. I would leave the interlocutors to continue with their work.”
Francisco Blanco spoke in the plural, as the Government, to emphasize that “we are concerned about the situation and the impact of the accident on employment, and for this reason we want to know first-hand the situation and the company’s plans.” Hence, the desire to repair the furnace “reassures us, due to the enormous repercussion it has for the ArcelorMittal plants in Asturias and in the country as a whole.”
The head of Industry was prudent, but pointed out that when the extent of the damage is known, it will be when they can make a final decision and offer a schedule, which we are all waiting for.”