Morgan Stanley | Our analyst Alain Gabriel highlights two pieces of news from the steel sector that are delaying decarbonisation targets. ArcelorMittal has announced that it is putting its decarbonisation plans on hold at two German plants (Bremen and Eisenhüttenstadt) given the energy policy and regulatory environment. In addition, Arcelor has confirmed that it will not be able to meet its 2030 emissions intensity targets. It justifies this on several grounds: lack of availability of green hydrogen-based energy, high import volumes versus weak demand, the effectiveness of European policies such as the CBAM, and uncompetitive energy prices. Alain sees this as a positive move, as the company is balancing its climate goals with its business objectives.
For its part, SSAB is delaying its project in Lulea due to delays in upgrading the electricity grid and technical difficulties in planning the existing grid. In addition, LKAB, its main iron supplier, has delayed its investment in DRI development due to uncertainty about the viability of the technology.
