Before senators, ArcelorMittal blames "French deindustrialization"

For the third time since January, the head of the French branch of the world's second-largest steelmaker has come to explain himself to parliamentarians.

The latter are concerned about the announcement of the elimination of more than 600 jobs in France, following the group's decision in November not to carry out the massive investment it had planned in Dunkirk - the largest blast furnace in Europe - to green the manufacture of steel, a fundamental metal for many industrial sectors.

In February 2022, then-Prime Minister Jean Castex came to Dunkirk to announce with fanfare and trumpets that the French government had agreed to provide financial support for the greening of the French steel industry, thereby guaranteeing its future and that of the entire region's industry. How did this decarbonization objective turn into a redundancy plan?

Mr. Le Grix de la Salle explained the tangle of crises that are gripping steel production in Europe: the decline in consumption on the Old Continent and particularly in France, global overproduction that caused prices to fall by 25% in Europe last year, unfair competition from subsidized Chinese steel, excessively high energy prices in Europe, not to mention the new American customs duties.

"There is no longer a market in France," declared Mr. Le Grix de la Salle: demand in the country is currently "less than 4 million tons," whereas it was "9 million tons ten years ago," he stated.

"Deindustrialization is a fact"

In fact, the two largest buyers of steel in France, the automobile and construction industries, are in the doldrums.

"Deindustrialization in France is a fact," the leader declared. "Italy represented twice the size of the French market," compared to "four times" today, he added.

Given the scale of the ongoing social protests and the concern of elected officials from all sides, he nevertheless renewed the group's commitment to confirming the creation of an electric furnace in Dunkirk "at the end of the summer", while saying that it did not currently have the "financial capacity" to replace its 11 blast furnaces in Europe at once.

The elected officials' questions became more incisive, trying to understand whether ArcelorMittal was sincere in its desire to remain in Europe or whether it planned, as the unions fear, to invest instead in low-cost countries such as Brazil or India, without having to worry about decarbonization issues.

EELV Senator Yannick Jadot notably considered that France and Europe had "wasted ten years on a real European strategy for the carbon-free steel industry" and accused ArcelorMittal of having benefited for years from "free quotas" of CO2, before converting late to the principle of an effective carbon border adjustment mechanism (CBAM).

"You cannot demand free allowances and an effective carbon border adjustment mechanism at the same time," said Mr. Jadot, "it is incompatible with WTO rules."

ArcelorMittal has not made "any profit on the free allowances," replied Mr. Le Grix de la Salle. However, "the more years go by, the more the cost of carbon and the amount of CO2 to be paid increase," he stated.

The group's decarbonization in Europe, which requires massive investments to be able to produce steel without CO2 emissions, notably by replacing coal-fired furnaces with electric ones, will continue, but "step by step," he also said. However, it is conditional on maintaining the "competitiveness" of European steel on the global market.