EU Approves €2.85 Billion Aid for Steelmakers ArcelorMittal and Thyssenkrupp
PARIS/FRANKFURT, July 20 (Reuters) – In a move aimed at supporting the reduction of carbon emissions in the steel industry, the European Commission has approved €2.85 billion ($3.20 billion) in aid for two of Europe’s largest steelmakers, ArcelorMittal and Thyssenkrupp (TKAG.DE). The approval comes as the European Union seeks to help local industries decarbonize production and remain competitive in the face of global rivals. The EU is also keen to prevent industries from leaving for other subsidy-rich regions, particularly the United States, which has attracted major players with its Inflation Reduction Act.
The aid package for Thyssenkrupp, which relies on public funding to decarbonize steelmaking, includes a €550 million direct grant and a conditional payment mechanism of up to €1.45 billion. Meanwhile, ArcelorMittal has been granted an €850 million package by the French government. ArcelorMittal, Europe’s largest steelmaker, plans to use the grant to decarbonize its production in Dunkirk, France, while Thyssenkrupp intends to build a green steel plant at its Duisburg headquarters.
EU antitrust chief Margrethe Vestager emphasized the importance of the aid package, stating, “This will contribute to the greening of one of the most polluting sectors, while helping reduce Germany’s dependence on imported fossil fuels and develop the renewable hydrogen value chain in the EU.” The approval of the aid marks a significant milestone for Thyssenkrupp, as it will enable the company to continue its efforts to decarbonize steel production, which is known to be one of the most CO2-intensive industrial processes.
Shares in Thyssenkrupp and ArcelorMittal rose 1.4% and 2.8%, respectively, following the announcement of the aid package. German Economy Minister Robert Habeck, who has faced criticism from labor representatives for allegedly lacking support for the steel industry, described the decision as “enormously important for climate protection and for Germany as an industrial location.”
The approval of the aid package reflects the European Commission’s commitment to helping heavy industries transition to more sustainable practices. By providing financial support, the EU aims to ensure that these industries can meet their climate targets and maintain their competitiveness in the global market. The aid package also aligns with the EU’s broader efforts to reduce carbon emissions and develop a green economy.
In conclusion, the European Commission’s approval of €2.85 billion in aid for ArcelorMittal and Thyssenkrupp represents a significant step in the decarbonization of the steel industry. This financial support will enable these companies to invest in green technologies and reduce their carbon emissions, while also ensuring the preservation of jobs and the competitiveness of the European steel sector. The approval highlights the EU’s commitment to tackling climate change and supporting industries in their transition to a more sustainable future.
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Original Story at www.reuters.com – 2023-07-20 11:17:00
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