Brussels, Feb 17 (EFE).- The European Commission approved this Friday a Spanish state aid of 460 million euros to help ArcelorMittal to build a renewable hydrogen-based direct reduction iron plant in Austurias.
As the Community Executive highlighted in a statement, this decision will help the steel company to partially decarbonise its steel production processes in Gijón.
It will also contribute to the achievement of the objectives of the European Union’s Hydrogen Strategy and the European Green Deal, while helping to reduce dependence on Russian fossil fuels and accelerate the ecological transition in line with the REPowerEU Plan.
Spain notified the Commission of this aid of 460 million euros, in the form of a direct subsidy, to support ArcelorMittal’s project to partially decarbonise its steel production in Gijón, where it operates two blast furnaces that produce hot liquid metal from a mixture of iron ore, coke and limestone.
Along with a new electric arc furnace, the newly built plant will replace the existing blast furnace, and natural gas, initially used in gas mixing, will be phased out of steel production processes, Brussels said.
Ultimately, he added, the plant will run on renewable hydrogen and syngas produced from waste and metallurgical gases.
The plant is scheduled to come online by the end of 2025 and will produce 2.3m tonnes/year of low carbon direct reduced iron.
Upon completion, the project is expected to prevent the emission of 70.9 million tons of carbon dioxide.
The Commission noted that ArcelorMittal is committed to sharing the know-how acquired through the project with other European steel producers.
The Community Executive specified that its green light for this state aid adheres to the EU rules on them, specifically, those intended to support the development of certain economic activities in the field of climate, environmental protection and energy.
Spain selected the ArcelorMittal project in the context of a public call in 2021 on hydrogen technologies and systems.
The aid has an “incentive effect”, according to Brussels, since the beneficiary would not carry out the investments in the production of green steel without public support.
The Commission also noted that the operation has a limited impact on competition and trade within the EU.
In particular, it is “necessary and appropriate” to promote the production of green steel, and it is “proportionate”, since the level of aid corresponds to the effective financing needs, highlighted the Community Executive.
Likewise, it has sufficient safeguards to guarantee that undue distortions of competition are limited, since if the project is very successful and generates additional net income, the beneficiary will return part of the aid received to Spain, he stressed.
In addition, he stressed, the beneficiary will share the technical knowledge acquired through the project with other European steel producers.
Lastly, the project is subject to monitoring to verify its progress towards the objectives of saving CO2 emissions, progressive elimination of natural gas and progressive introduction of renewable hydrogen.
The aid has positive effects that outweigh any possible distortions of competition and trade in the EU.
On this basis, the Commission approved the Spanish measure under the EU state aid rules.