“ArcelorMittal has confirmed a €1.3 billion ($1.5 billion) investment to construct a 2-million-tonne electric arc furnace (EAF) at its Dunkirk steelmaking site in northern France. The project, set to start operations in 2029, will replace a blast furnace and reduce CO₂ emissions per tonne of steel by approximately three times compared to traditional methods, achieving around 0.6 tonnes of CO₂ per tonne using a mix of scrap, HBI/DRI, and hot metal. Half of the funding comes from France’s Energy Efficiency Certificates (CEE) mechanism, highlighting strong governmental support for industrial decarbonization amid broader European efforts to protect the steel sector.”
ArcelorMittal’s Major Decarbonization Push at Dunkirk
ArcelorMittal, the world’s leading steel producer, has formally greenlit one of its most significant sustainability projects in Europe with the confirmation of a €1.3 billion investment—equivalent to roughly $1.5 billion—to build a state-of-the-art electric arc furnace (EAF) at its integrated steelmaking complex in Dunkirk, northern France. This move represents a pivotal shift from traditional blast furnace operations toward lower-carbon steel production, aligning with the company’s broader strategy to decarbonize its European footprint while responding to tightening regulations and market demands for greener materials.
The EAF, with an annual production capacity of 2 million tonnes, is scheduled to come online in 2029. It will primarily replace one of the site’s existing blast furnaces, transitioning a portion of output to a more flexible and emissions-efficient process. Electric arc furnaces melt scrap steel and other metallic inputs using electricity rather than coal-based coke, drastically cutting direct emissions. ArcelorMittal estimates the new setup will produce steel with about 0.6 tonnes of CO₂ per tonne, based on a feedstock blend of recycled scrap, hot briquetted iron (HBI), direct reduced iron (DRI), and some hot metal. This marks a roughly threefold reduction compared to conventional blast furnace routes, which often exceed 1.8-2 tonnes of CO₂ per tonne of steel.
Funding for the project benefits substantially from France’s Energy Efficiency Certificates (CEE) program, a regulatory framework designed to incentivize energy savings and CO₂ reductions across industries. The CEE support will cover 50% of the €1.3 billion total investment, underscoring the French government’s commitment to backing large-scale industrial transformations that support national and EU climate goals. This public-private alignment has been key in moving the long-discussed project forward, especially as European steelmakers face competitive pressures from higher-cost green transitions and import surges.
The Dunkirk site, one of ArcelorMittal’s largest in Europe, plays a central role in the company’s flat products portfolio, supplying automotive, construction, and appliance sectors. Integrating the EAF will enhance the facility’s ability to produce high-quality steels with significantly lower embodied carbon, making it more attractive to customers pursuing Scope 3 emissions reductions. The project also ties into ArcelorMittal’s XCarb® initiatives, which emphasize recycled and renewably powered steel production pathways.
Broader Context and European Steel Industry Dynamics
This investment arrives at a critical juncture for the European steel sector. The industry has been grappling with elevated energy costs, stringent carbon pricing under the EU Emissions Trading System (ETS), and the rollout of the Carbon Border Adjustment Mechanism (CBAM), which imposes fees on high-carbon imports to level the playing field. ArcelorMittal has welcomed recent European Commission actions to strengthen protections, including tighter scrutiny of steel imports and refinements to CBAM loopholes, which help safeguard domestic producers investing in green technologies.
The Dunkirk EAF forms part of a phased approach to decarbonization across ArcelorMittal’s European operations. While full replacement of blast furnaces requires massive capital and infrastructure changes—including potential direct reduced iron facilities and access to low-carbon electricity—the company views this as a foundational step. Similar EAF projects are advancing elsewhere, such as in Spain, but the scale and timing of Dunkirk position it as a flagship effort in France.
Economic and Employment Implications
Beyond environmental benefits, the project reinforces ArcelorMittal’s long-term presence in France, where the company employs thousands and contributes significantly to industrial output. The construction phase will generate jobs in engineering, construction, and supply chains, while the operational EAF is expected to maintain or enhance skilled employment at the site through modernized processes. By improving cost competitiveness in a carbon-constrained world, the investment aims to secure the facility’s viability against global overcapacity and volatile raw material prices.
ArcelorMittal’s leadership has emphasized that such investments depend on supportive policy frameworks, affordable clean energy, and fair trade conditions. The presence of high-level French officials at the site announcement highlights the strategic importance of the steel industry to national industrial policy and the energy transition.
Technical and Operational Details
The EAF will incorporate advanced melting technology to handle diverse feedstocks efficiently. A mix of scrap (abundant in Europe) with HBI/DRI will allow for premium steel grades while minimizing emissions. Ladle furnaces and other downstream equipment will ensure quality control for flat products. The site’s existing infrastructure—port access, rail links, and proximity to customers—provides logistical advantages.
Key Project Metrics
Investment: €1.3 billion (~$1.5 billion)
Capacity: 2 million tonnes per year
Startup: 2029
Emissions Intensity: ~0.6 t CO₂/t steel (vs. ~1.8-2 t for blast furnaces)
Funding Support: 50% via Energy Efficiency Certificates (CEE)
Primary Feedstock: Scrap, HBI/DRI, hot metal blend
Site: Dunkirk, France (replacing one blast furnace)
This Dunkirk initiative positions ArcelorMittal to meet rising demand for low-carbon steels from automotive manufacturers, renewable energy projects, and construction firms targeting net-zero goals. As Europe accelerates its green industrial agenda, such large-scale investments signal confidence in the viability of sustainable steelmaking despite the challenges.
