SteelWatch

Unless it acts fast, ArcelorMittal will lose the race to sustainable steel

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SteelWatch projection onto the new Arcelor Mittal building project, in Luxembourg city, Luxembourg, on 22 July 2024.

With the Paris Olympics opening ceremony and the display of the low carbon Olympic torch, it’s time to evaluate. In the race to sustainable steel, how is ArcelorMittal performing?

Pascal Husting, spokesperson for the Shiny Claims, Dirty Flames campaign

My childhood was marked by two things: steel and sport. Growing up in Esch-sur-Alzette, Luxembourg, the ten or so blast furnaces at Terres Rouges, Belval, and Schifflange seemed like an inescapable horizon. 

The eight-hour shifts that my father, like his father before him, worked at the Belval rolling mill structured our family life. I knew what to do when a deafening noise announced the cloud of yellowish dust that would blanket the neighbourhood: when the Schifflange converters were being filled, the washing had to be brought in quickly.

Escaping our cramped council housing, we spent most of the day outside. Often, instead of playing football, we engaged in endurance challenges. Our next-door neighbour was Charles Sowa, the Olympic athlete whose exploits at the Mexico and Munich Games inspired us to imitate his distinctive stride. My childhood was imbued with two prides: the pride of steelworkers, and the pride that one of our own had graced the world’s greatest stadiums.

Half a century later, I find myself involved in the very first global effort by human rights and environmental defenders to target a major player in the steel industry: ArcelorMittal. By sponsoring the Paris Olympic Games, the world’s second largest steelmaker became a target for the ‘Shiny Claims, Dirty Flames’ activist campaign for its nice words on climate and human rights, that it keeps failing to turn into action. 

Launched by the Fair Steel Coalition, a global movement of civil society actors, the campaign challenges the steel giant’s inadequate and sometimes deceptive policies and practices, with the goal of bringing about rapid and far-reaching changes in the steel industry. We believe that ArcelorMittal has a responsibility to be a leader that helps to make this industry sustainable and more respectful of human beings and the planet. Doing so would  inspire all those who work on steel with renewed pride, and an appetite for change themselves.

With the Paris Olympics opening ceremony and the display of the low carbon Olympic torch, it’s time to evaluate. In the race to sustainable steel, how is ArcelorMittal performing?

It’s clear ArcelorMittal didn’t shine in the pre-Olympic season. While flaunting its low-carbon torches across France, bad decisions, setbacks and disappointments piled up. It all began at its April annual general meeting, when the company decided to continue its share buyback policy. It is precisely this policy of short-term maximisation of shareholder value that is preventing the company from embarking on decarbonising its operations.

Then, the Center for Investigative Reporting revealed multiple environmental permit violations by ArcelorMittal at Zenica operations in Bosnia and Herzegovina, and the company’s failure to meet the obligations it entered into in 2004 when it bought the steelworks for a dollar. While ArcelorMittal denies these allegations, the fact remains that Zenica has been ranked as one of the world’s most polluted cities for decades. 

Next was ArcelorMittal-Nippon Steel India joint venture, majority-owned by ArcelorMittal, was caught importing Russian coal in 2023, raising questions about the group’s commitment to severing ties with Putin’s Russia. 

In Puglia, where ArcelorMittal held a majority stake in Europe’s largest steelworks in Taranto until February 2024, Italian prosecutors announced investigations and carried out searches for suspected fraud in the EU Emissions Trading Scheme.

As far as climate targets are concerned, the first half of 2024 was one of systematic backtracking. When concerned investors asked it to commit to the 1.5C target, ArcelorMittal stated that ‘in the absence of appropriate global policy, we are not in a position to credibly set a science-based group target at this time.’ 

In a written response to the NGO SteelWatch’s ArcelorMittal Corporate Climate Assessment 2024 report, the company suggested that it would not use green hydrogen before 2030 in Europe, as it considers that ‘there is no indication that [green hydrogen] will be available in the price or quantities needed to supply competitive low-carbon steel by 2030’. 

Despite announcing plans to produce low-emission iron in Western Europe and Canada, including a vaunted ‘world’s first zero-carbon steel plant’ supposedly operational in 2025, ArcelorMittal has yet to make a final investment decision on any of these projects.

Members of the London Climate Choir sing to steel company ArcelorMittal leadership, Aditja and Lakshmi Mittal, in front of the company’s 2012 Olympic Orbit sculpture in London, United Kingdom on the 22nd of July 2024. ArcelorMittal is an official sponsor of the 2024 Olympics in France, and is using the games to promote its low-carbon steel, while it is expanding coal-based production. The choir is calling on them to be true champions on climate change and human rights, as part of the Shiny Claims, Dirty Flames campaign run by SteelWatch.

ArcelorMittal is off to a poor start in the race for clean steel. This becomes all the more apparent when we look at how its direct competitors are doing. In June, European steelmakers Thyssenkrupp and SSAB obtained scientific validation that their climate objectives were in line with the 1.5C limit. Strategic and concrete decisions are being made elsewhere. Thyssenkrupp’s Duisburg direct reduction plant is set to run entirely on green hydrogen from 2029, while H2Green Steel and Salzgitter are investing directly in electrolysers to produce green hydrogen. In Boden, Sweden, H2Green Steel plans to produce green iron and steel from 2026. 

This is not to sing the praises of ArcelorMittal’s competitors – they each have their own weaknesses to overcome. But these few examples show that the game is afoot, and that there is every chance that by delaying its entry into the game, ArcelorMittal will be the big loser in the steel industry for decades to come.

However, and these are probably the only positive notes of this pre-Olympic season, in recent exchanges between ArcelorMittal and the Fair Steel Coalition, Aditya Mittal confirmed that climate and human rights are ‘of great importance to me as CEO of ArcelorMittal’, while a senior executive stated that ‘we certainly accept that as a global company, we have our share of responsibility’.

Could these be the first signs of a breakthrough to come? The company is indeed working to integrate its new human rights policy into its organisational fabric and is preparing its third climate action report, which it intends to publish “in due course”. It deserves praise for its focus on human rights. The leadership seems to have become aware of the gap between rhetoric and reality on the ground. This is promising. 

ArcelorMittal must now close this gap. It must immediately implement a global zero-tolerance policy against any form of harassment and intimidation directed against communities who report the negative effects of its plants and mines.

The climate issue is more complex. The company struggles to acknowledge that, as the world’s second-largest steelmaker, it is a “market maker”, not a “market taker”. It uses unconvincing arguments to delay the transition in Europe, while developing its coal-based operations in the Global South. The same applies to anti-pollution standards: double standards continue to prevail. In short, if steel production were an Olympic discipline, there’s no doubt ArcelorMittal would not deserve a medal.

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