Transformational Titan’s Tirade

ArcelorMittal, Europe’s largest steel producer, announced the cancellation of hydrogen‑based transformation plans at its Bremen and Eisenhüttenstadt plants. The company declined €1.3 billion in subsidies after concluding that Germany’s energy costs and uncertain hydrogen availability made the investments uneconomical. This decision marks a significant setback to the government’s ambition to foster a green‐hydrogen value chain in heavy industry.

Energetic Economics & Electrifying Exigencies

ArcelorMittal CEO Geert van Poelvoorde cited surging electricity costs, higher than most European neighbours, combined with volatile supply and surging cheap steel imports, as core reasons for withdrawal. Head of Bremen & Eisenhüttenstadt sites Dr Thomas Bünger said hydrogen is currently priced at €7‑9 per kg, but would need to be close to €2 to make projects viable.

Regulatory Ruckus & Renewables Red Tape

Germany’s energy minister and industry groups lamented the decision, underscoring the need to simplify EU and national rules for renewable electricity and hydrogen production. Stefan Dohler of the BDEW urged the federal government to swiftly reduce regulatory burdens and ensure cheaper electricity.

Concurrent Commitment from Competitors

Despite ArcelorMittal’s pullback, other steelmakers such as Thyssenkrupp and Salzgitter reaffirmed their dedication to hydrogen steelmaking. Thyssenkrupp’s €3 billion hydrogen reduction plan in Duisburg remains intact, though the firm flagged conditions for success, -particularly reliable hydrogen supply and energy pricing.

Salzgitter Group’s Commitment to Green Steel TransformationGermany’s second-largest steelmaker, the Salzgitter Group, remains steadfast in its mission to transition toward sustainable steel production. Emphasizing its dedication, the Lower Saxony-based company affirmed its ongoing progress in the first phase of its transformation project. As a pioneer in the shift to green steel, Salzgitter is now focused on deepening its efforts to develop a robust hydrogen economy and advocating for more competitive electricity prices, both crucial elements in achieving environmentally responsible manufacturing.

Thyssenkrupp Reaffirms Green Steel Project Amid Calls for Government SupportThyssenkrupp is moving forward with its €3 billion ($3.5 billion) plan to build a green steel facility in Duisburg, even as rival ArcelorMittal abandons similar efforts. In a firm statement, Thyssenkrupp Steel Europe confirmed its commitment to completing the first direct reduction plant at the site. However, the company emphasized that for the transformation to be economically viable, government action is essential, particularly in accelerating the development of hydrogen infrastructure and ensuring access to competitively priced energy.

Hydrogen Infrastructure & Industrial Symbiosis

Germany is rapidly building a hydrogen network, planning 9,000 km of core pipelines by 2032, backed by €19 billion investments. Partnerships between RWE and ArcelorMittal aim to couple offshore wind with electrolysis capacity (70 MW pilot by 2026, scaling to gigawatt scale) to supply green power and hydrogen to steel sites. Hamburg’s hydrogen‑DRI plant under the Steel4Future strategy is supported by a €55 million federal grant for green hydrogen direct‑reduced iron production.

Technical Transition: DRI‑EAF Blueprint

The decarbonisation roadmap involved hydrogen‑based direct reduced iron plants and electric arc furnaces. Bremen and Eisenhüttenstadt were designed to produce up to 3.5 million tonnes of steel annually by 2030, cutting over 5 million metric tons of CO₂. The existing Hamburg pilot, using Midrex DRI technology, aims to deliver 100,000 tonnes of sponge iron annually by 2025, expanding to over one million tonnes by 2030.

Policy Pivot or Project Pause?

The German economy ministry regretfully noted that no subsidy payments were made, so no repayments are required. They stressed continued support for other green‑steel projects, including those by Thyssenkrupp and Salzgitter. Nonetheless, industry voices highlighted that continued high hydrogen and electricity costs, EU regulatory complexity, and foreign competition impede green transition.

Prospects & Precedents Ahead

Despite ArcelorMittal’s retreat, Germany’s vision for a hydrogen‑based industrial future continues. Support for electrolyser pilots (like RWE’s Lingen plant) and coupling them to hydrogen pipelines point to infrastructure enablement. If electricity pricing reforms succeed and EU support strengthens, steel decarbonisation may resume with renewed vigor. The EU’s carbon border adjustment mechanisms may also pressure policy adjustments to protect local steel .

Key Takeaways:

• ArcelorMittal cancelled two hydrogen‑based green‑steel projects (Bremen & Eisenhüttenstadt), forfeiting €1.3 billion subsidies due to prohibitive energy and hydrogen costs.

• Germany is building a 9,000 km hydrogen pipeline network and funding hydrogen‑DRI pilots (Hamburg €55 million; RWE Lingen electrolyser) to support future green steel.

• Thyssenkrupp and Salzgitter remain committed to green steel amid calls for cheaper energy, streamlined regulations, and protection from cheap imports.