The European Commission has approved a €460 million Spanish measure to support ArcelorMittal Spain in decarbonizing its steel production.

The measure, according to the European Commission, will contribute to the achievement of the EU Hydrogen Strategy and the European Green Deal targets, while helping to reduce dependence on Russian fossil fuels and streamline the green transition in line with the REPowerEU Plan.

The Spanish government had passed the measure to the Commission for its approval, stating that the funds would be used to support the decarbonization of ArcelorMittal's steel production in Gijón, where it operates two blast furnaces producing liquid hot metal from a mixture of iron ore, coke and limestone.

The aid, which will take the form of a direct grant, will support the construction of a renewable hydrogen-based direct reduced iron plant. Together with a new electric arc furnace, the plant will substitute the current blast furnace. Natural gas, initially used in the gas mix, will be gradually phased out of the steel production processes. Ultimately, the plant will be operated using renewable hydrogen with syngas produced from waste and metallurgical gases.

The plant is envisioned to start operating by the end of 2025 and it is expected to produce 2.3Mt of low-carbon direct reduced iron per year. Once completed, the project is expected to reduce carbon dioxide emissions by 70.9Mt.

‘‘This €460 million measure enables Spain to support ArcelorMittal’s plan to decarbonize its steel production processes.'’

Margrethe Vestager, executive vice-president, competition policy, European Commission

‘‘This €460 million measure enables Spain to support ArcelorMittal’s plan to decarbonize its steel production processes,’’ commented Margrethe Vestager, executive vice-president in charge of competition policy. ‘‘It will contribute to the greening of a very energy-intensive sector, in line with our commitment to transition to a net zero economy. At the same time, the measure ensures that competition in the single market is not unduly distorted.”