The plant will become the world’s first to introduce a purely “green” steelmaking operation.
According to the agreement, the government will provide 500 million euros in investment for its modernisation. By 2025, the plant in Sestao will produce 1.6 million of steel with zero carbon emissions.
In the event that green hydrogen proves too expensive at that point, the company will operate with gas.
“Given the significant expense linked with the transition, ArcelorMittal expects that government support will cover at least half the additional costs so that the operation can remain competitive in terms of speeding up the decarbonisation programme,” the company said.
ArcelorMittal also announced that it plans to invest 1 billion euros in another plant producing cast iron, now operating on green hydrogen near Bilbao.
Steelmaking has traditionally used coal for production and in responsible each year for about 8 % of global carbon emissions. Hydrogen has for some time been proposed as a replacement for coking coal as it provides the same characteristics in terms of heat and oxygen removal.
ArcelorMittal said the Spanish mill will become the first serious instance of the use of green hydrogen to produce direct reduced iron.
“This means that ArcelorMittall will be the first company in the world able to offer its customers significant volumes of steel with zero carbon emissions,” the company said.