VARIO COLLOQUIM 2019 – Key Note

Carbon neutral steelmaking at ArcelorMittal :

A Key Enabler for the Circular Economy

Carl De Maré, VP Technology Strategy

2

No 1 in

North America

No 1 in

Latin America*

No 1 in

EuropeNo 1

in the CIS

No 1 in

Africa

ArcelorMittal

Others

Hot strip millBlast furnaces

Steel shop

Raw material yard

Sinter plants

Power plant

Steelanol

850 hectares, of which 320

hectares are afforested

Coking plant

Cold rolling mill

and finishing

ArcelorMittal Gent : Integrated from raw materials to finished products

5.4 Mt Flat Steel Production

OCAS Research

Center

44

CO2

CO2

CO2

Human induced emissions • Fossil fuels to power our

economies• Agriculture and farm

animals• Deforestation

CO2

CO2

CO2

CO2 400ppm

Over the last decades, result of intensive human activity, CO2 concentrations have

increased quickly, exceeding 400ppm in 2017

CO2

CO2

CO2

CO2

CO2

CO2

CO2CO2

CO2

CO2

Natural phenomena affecting CO2 levels and climate

• Volcanic eruptions• Axis of earth tilting• Changes in Sun’s energy output• Meteorite impacts• Release of CO2 from oceans and

change in vegetation coverage

5

Governments have agreed to address greenhouse emissions to ensure human-induced

temperature increase remains below 2˚C by 2100m, with target of below 1.5˚C

5

Paris agreement

Global temperature rise due to humans remains below 2˚C by 2100, target 1.5˚C

• Peak in global emissions over the next decade (ASAP)

• Reach carbon neutrality globally by around 2050

• Need to shift to carbon negative economies beyond 2050

• Current policies (carbon markets, renewables mandates etc.) are instruments to meet these goals

2010 2050 2100

CO

2em

issi

on

s –

bill

ion

to

nn

es

Global total net CO2 emissions for 1.5 ˚C scenarios

Source: United Nations IPCC report November 2018

+10Gt

-10Gt

+5Gt

-15Gt

+40Gt

6* Defined as end of life material recycled to make same material again

Sources: WSA, Plastics Europe, ArcelorMittal Corporate Strategy analysis

6

Sources

Mill

ion

to

nn

es

Global production

Materials are responsible for 25% of GHG world-wide

Last 3 decades the material use has tripled

0

1,000

2,000

1990

2000

2010

2018

Steel

Primary

Secondary*

0

200

400

1990

2000

2010

2018

Plastics

Primary

Secondary*

0

1,000

2,000

3,000

4,000

5,000

1990

2000

2010

2018

Cement

Primary

“Our world is built around the use of a variety of materials. All industries face the same issue : meeting

the global demands while significantly reduce their climate impact”

CO2 when produced

from primary sources

1t CO2/t

X 3.5 X 2.3 X 3.3

2t CO2/t 6t CO2/t

For many applications, steel remains the best option today in terms of overall CO2emissions and recyclability

7

AutomobileBody in white

Steel900kg

1.8t CO2

Aluminium470kg

5.6t CO2

Steel16.3 tonnes

Fiberglass10.4 tonnes

33t CO227t CO2

Yacht46’ trawler

Bottle0.75l

Glass420g

Steel177g

350g CO21,800g CO2

Building structureone storey 5x8m

Concrete32 tonnes

Steel2.6 tonnes

5t CO25t CO2

Piping system3 metres of 6” schedule 80

Steel130kg

260kg CO2

Plastic (PVC)27kg

60kg CO2Steel versus other materials

* Only emissions from production of material from primary sources (virgin); does not take into account lifecycle CO2 emissions of different materials

Source: ArcelorMittal Corporate Strategy analysis

CO2 when produced

from primary sources

2761

124

432

70101

563

384

India Developing(other)

China Developed

The need for steel will continue to grow in the next decades

as developing countries continue to grow.

8

Finished steel consumption growthkg steel per capita

Sources: WSA, United Nations, ArcelorMittal Corporate Strategy analysis

2001

2018

9

Steel intensity in Modern Society is further increasing

Sustainable Energy production is increasing the need for materials

[ton steel /MW*]

300

200

100

hydro

gas-fired

nuclear

coal-fired

wind

CSP

* steel consumptions per installed MW capacity

10

-

1,000

2,000

3,000

1990 2000 2010 2020 2030 2040 2050

Growing scrap availability will mainly compensate the growing steel demand

Steel will continue to rely on primary sources (iron ore)

Secondary(end-of-life scrap)

Primary (iron ore)

Global steel demand and production outlook, mt

• Quantity of secondary sources (end-of-life scrap) will increase over next decades; electricity will become green over this period

• But due to growth of demand, will continue to rely globally on primary sources (iron ore) to produce steel

• Today we use coal and natural gas as energy; steel industry will have to transition to clean energy

Made mostly with Electricity

Made mostly with coal and natural gas

0.1-0.5Gt CO2

1.5-2.5Gt CO2

10

Iron ore → Iron

High Temp Gas Reaction

Paradigm Shift in Industry 3000MW required for AM Gent

CO2 abatement cost >xxx€/t

Carbon-Monoxide Hydrogen

To produce Primary (Iron Ore) Steel without using Carbon, we will need massive amounts

of electricity

Affordable

Scalable

Circular

?

12

Paradigm Shift of Industry : From Energy Integration to Carbon Integration

All energy requirements are “imported” with the raw materials for the production process

12

Iron Ore

% Powder CoalOxygen

Cleaned SynGasCO/CO2/H2

FeO + C + O2 ➔ Fe + CO + CO2 + Heat

Power & Heat Plant

Coke

Hot Air

40%

Powerplant30%

Heating

30%

Reduction

BOUDUART REACTION

at High Temperature!!!

CO,CO2,H2

CO

CO2

H2

Carbon4PUR

Torero

IGAR

C

3D

CO2CO,H2

Moving to “Carbon Integration” :

CAPTURE, REUSE and RECYCLE the Carbon molecules

Green H2

CCUS

Green H2

1.

CAPTURE

2. USE3. RECYCLE

14

CAPTURE : Integrating breakthrough technologies can bring down the

costs for CCUS by savings on energy efficiency

Carbon2Value in Gent and 3D in Dunkerque : 30m€ for 2 Carbon capture pilot project for BF gas

Pilot plant of 0.5t/hr is under construction. Aim is to move to 100ton/hr in 2023.

Steel and Chemical industry is well located for CCS

Example : Northern Lights Project in Norway

Page 15

Confidential

13/01/2020

Fast CO2 abatement while developing/scaling

further Circular Carbon Technology

Negative CO2 emissions when combined with

Circular Carbon

USE : Industrial Bio-Technology to convert waste gas into high value molecules

(chemicals, proteins, …)

16

Carbon Waste Gas

CO (+H2+CO2)

Water

H2O

Ethanol

C2H5OH

Microbe

Steelanol construction side at ArcelorMittal Gent

120m€ investment – 80 million liter Ethanol capacity – start up 2021

17

13/01/2020

Industrial Scalable Bio-Technology enables to convert CO and H2 into

valuable chemicals with high energy efficiency

Steelanol : a 120M€ project with Lanzatech to convert Blast Gas into Bio-Ethanol.

This project is co-fundedby the European Union

Highly Restricted 19

Source: ArcelorMittal Corporate Strategy, Group CTO

European ethanol market today is mainly for Light vehicle transport. Market potential to replace fossil

stockfeed for plastics, jetfuel and heavy duty transport is however a multiple : 435 billion liter. European ethanol market 2017 and 2030

5 717

435

110

233

75

LV

Transport

Industry Demand

2017

2 10

LV

Transport

Industry

0

Demand

2030

existing

markets

Jetfuel Heavy Duty

Transport

Plastics Total market

potential

2030

2017

Blending

increase from

5% today to

15% in gasoline

Diesel engines

are running on

95% Ethanol

blend

Jetfuel from

Ethanol

homologated

by IATA. 2l

Ethanol for 1l

Jetfuel

23mt ethylene

and 9.5mt

propylene

requires 75b

liter of Ethanol

Current

industry market

is ca 2b liter +

5b liter due to

blending

mandate of

Ethanol in

Gasoline

When roll-out 100% within Europe Steel sector, potential is 10b liter, respectively 30b liter when

combined with H2.

Circular Carbon – Upgrading waste wood and plastics into “Bio-Coal”

Torero – 30m€ demo project to convert 120.000 ton waste materials into “bio-coal”

in ArcelorMittal Gent

21

Circular Carbon : Reforming CO2 with waste hydro-carbons into Hot

reduction gas for the Blast Furnace

208

247

100

Steam Methane

Reforming

DryMethane

Reforming

Dry Plastic

Reforming

kJ/mol CH4

CH4+H2O ➔3H2 + CO

CH4+CO2 ➔2H2 +2

CO

Plastic + CO2 ➔ 2H2 +

2 CO

50

44

CO2 g/MJ syngas

0

IGAR

IGAR – 20m€ innovation project to develop the CO2 plasma

reforming and the high temperature injection technology in

ArcelorMittal Dunkerque

Challenge 1 : Level Playing Field with ImportsArcelorMittal Europe plans to reach -30% in 2030 vs 2018, but imported steel has no Carbon Tax

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import • ArcelorMittal Gent roadmap – 40% GHG

reduction in 2027 versus 1990

• Import steel has 30% higher CO2 emissions

versus AM Gent today

• Imports increased since 2004 with 60% leading

to 25mt/yr CO2 “leakage”

• Need for “carbon inclusion mechanism” and

“level playing field”

20221990 20192018 2020 2021 2023 2024 2025 2026 2027

-23% -41%

CO2 emissions kg/t

CO2 roadmap ArcelorMittal Gent

1990 2018 2027

5.4 mt 6.5 mt3.8 mt

Production ArcelorMittal Gent

23% 41%

23

Transport

Oil & Gas

Blast Furnace Chemical & Refinery

Coal mining

CO2 emissions CO2 emissions

Incinerator

Waste Collecting

plastics

wood

sludge

CO2 emissions

IGARH2

ETS CO2

Challenge 2 : Cross Sectorial Approach versus Sectorial Carbon Policies

CO2 emissions

Challenge 3 – International Synergies versus National Climate Targets

Connecting ArcelorMittal Gent with Dow Chemicals Terneuzen

2020 2025 2030

SteelanolSteel2Chemicals

H2 BF

Steelanol + H2

2022

Plastic recycling

Scale-up:

• Steelanol

• S2C

Pipeline is no regret

investment!

ToreroCUST

CCU-Hub

25

Carbon Neutral Industry in Europe and Circular Economy are going hand-in-hand

However important Policy Roadblocks need to be resolved

Challenges

- ETS Carbon Pricing : Need a

level playfield field also for

exported products

- Target setting for ETS and non-

ETS or the NDCs are non-

productive

- Recognition of “Circular Carbon”

to be used in priority as

Renewable Source (“Plastics,

Fuels, …)

- Legislative hurdles for cross

border transport for waste and

CO2

Thanks for your attention

Carl.demare@arcelormittal.com

@carl_mare

mailto:Carl.demare@arcelormittal.com