IIDMA warns of the urgent need for ArcelorMittal to transform its business model

  • The International Institute of Law and Environment (IIDMA) has analyzed ArcelorMittal’s 2023 Annual Report and has found that relevant information on the environmental and climate impacts of its operations is omitted  

  • The steel company will not have the direct reduction iron (DRI) plant powered by renewable hydrogen ready in 2025 in Gijón despite the fact that the Government of Spain has already published the concession of 450 million euros for it 

  • 15 environmental and human rights organizations from around the world have joined together in the Fair Steel Coalition to pressure the steel industry to change its climate and environmental policies. 

ArcelorMittal, the largest steel company in the world, will not have the direct reduction iron (DRI) plant powered by green hydrogen ready in Gijón in 2025, as the company itself has confirmed in the press, despite the fact that the Ministry of Industry, Commerce and Tourism has already regulated, in 2023, the granting of 450 million euros of public money. 

The International Institute of Law and Environment (IIDMA) has confirmed that, in the recently published 2023 Consolidated Annual Report (IAC), ArcelorMittal assures that it will allocate 1,000 million euros to the construction of a hydrogen DRI plant in Gijón (450 million from direct aid from the Spanish Government, the largest Strategic Project for Economic Recovery and Transformation – PERTE – granted to date). However, they do not specify whether hydrogen will be renewable as they did in the 2022 IAC. This could imply a breach of Royal Decree 251/2023, of April 4, which regulates the direct granting of subsidies to the company ArcelorMittal España SA for the execution of the DRI Circular Hydrogen project, which in article 5.16 specifically details that “The beneficiary will ensure that the hydrogen used in the project for the operation of the direct reduction plant is produced from renewable energy sources.”  

“If it is confirmed that the plant intends to be put into operation with hydrogen from fossil gas using this aid, it is important to review the framework under which it was granted, to see if this would mean a breach of the same and, therefore, that ArcelorMittal would have to reintegrate the aid granted in its entirety, states Carlota Ruiz-Bautista, environmental lawyer at IIDMA. In addition, the company still does not have the roadmap that includes short and medium-term objectives and measures to guarantee the transformation needed to reduce its pollutant emissions. 

At a global level, the analysis of both the 2023 Annual Report and the 2023 Consolidated Annual Report (CAI) omit relevant information about the environmental and climate impacts of their operations. Specifically, the Institute has confirmed that ArcelorMittal’s priority to decarbonize its activities in the medium term is focused on Europe and Canada, since all investments and innovation projects contemplated are concentrated in these regions. The company does not make it completely clear that it currently does not contemplate decarbonization projects outside these regions (except in Brazil), but rather that reality must be deduced by omission of information or by very generic comments. 

“Good practices in one geographic area cannot compensate for the almost complete absence of them in another geographic area, since it represents the denaturalization of any decarbonization strategy that ArcelorMittal may implement,” says IIDMA environmental lawyer Marta Vicioso.   

The steel company aims to reduce its greenhouse gas emissions by 25% in 2030 but should explain in detail how it will achieve this figure. “It is extremely difficult to believe that in seven years ArcelorMittal will reduce its global emissions by 25% if the reduction is essentially made up of improvements in its European and Canadian headquarters,” explains Vicioso. 

Civil society acts: the ‘Fair Steel Coalition’ is born 

In this scenario, civil society has begun to mobilize. 15 environmental and human rights organizations from around the world have joined together in the Fair Steel Coalition to promote the transformation of the steel industry. 

Among their first actions they have presented the report ‘The real cost of steel: Environmental racism, sacrifice zones and impunity in the supply chain’ ( available here in English ). This document details the serious impacts (land grabbing, destruction of ecosystems, loss of livelihoods or health problems) with which the steel companies ArcelorMittal and Ternium could be related in different communities in Brazil, Liberia, Mexico and South Africa.   

On the other hand, several members of the Fair Steel Coalition are touring Europe making their demands known in meetings with political leaders, civil society organizations and representatives of the private sector (banks and companies). In this way, the so-called ‘The Defenders Tour’ is visiting, from April 21 to May 17, Amsterdam, Brussels, Paris, Luxembourg, Marseille and Toulouse.  

Also, on Monday, April 29th, on the eve of ArcelorMittal’s Annual General Meeting of Shareholders in Luxembourg, in which several coalition members participate, the ‘Steel for People & Planet Meeting‘ took place. This event was attended by human rights and environmental advocates from around the world such as Eduardo Mosqueda (Mexico), Samson Mokoeda (South Africa), and Julia Hovenier (Netherlands), among others. 


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