ArcelorMittal Dofasco to Get "Major" Funds to Decarbonize: Trudeau

Trudeau did not provide details on the amount of the investment or what equipment or process changes it might entail. But, he added, “The bottom line is this, another iconic steelmaker will become more competitive and an even stronger partner in reducing emissions.”

An ArcelorMittal Dofasco spokeswoman did not respond to a request for comment for this article.

The Canadian prime minister made the remarks during a visit to Algoma Steel last week in which he announced government funding of C$420 million ($340 million) to support the Sault Ste Marie, Ontario-based steelmaker’s switch from integrated steelmaking to electric arc furnace production.

“Combined, these two projects alone have the potential to reduce our emissions by about six megatons a year, helping us reach our ambitious climate goals,” Trudeau said.

ArcelorMittal Dofasco has three blast furnaces – the No. 2, No. 3, and No. 4 – with daily ironmaking capacity of 10,400 tons, although the No. 3, with daily capacity of 2,500 tons, has been idled since March 2020, according to SMU’s blast furnace status table.

The mill also has an EAF with annual capacity of 1.4 million tons per year, per data collected by SMU.

Reduced carbon emissions should also give Canadian steel “an even greater edge over imported steel,” Trudeau said.

Canada has pledged to be carbon neutral by 2050. Part of the goal is expected to be achieved by switching steel production from the carbon-intensive blast furnace route – and its reliance on coking coal – to EAF production.

Trudeau said the reduction in emissions from the projects at Algoma and Dofasco would be equivalent to removing 900,000 passenger vehicles from the road.

“We’re up against a real challenge when it comes to climate change, there is no doubt. But we also have a real opportunity, too,” he said. “This is not time for old ways of thinking or skeptics that would tell us we have to choose between jobs or climate action.”

Market participants and industry analysts had predicted that others might follow in Algoma’s footsteps. Some are concerned about the potential scrap squeeze that might result – especially given that Canadian scrap is a key input for U.S. EAF producers.

It’s also unclear whether labor will go along with a switch to more EAF steelmaking when weighing potential future job gains against the reality of job losses related to idled blast furnace and coking coal operations.

Case in point: USW Local 2251 President Mike DaPrat boycotted Trudeau’s announcement at Algoma because of concerns about lost jobs and about the industry facing what he considered an unfair burden when it comes to reducing carbon emissions.

He suggested in an interview with SMU last week that taking passenger vehicles off the road – especially given how much they contribute to carbon emissions – should be just as much a priority as switching blast furnaces to EAFs.

“It’s the carbon targets for the country (that should be addressed), not just for one industry,” DaPrat said at the time.

By Michael Cowden, Michael@SteelMarketUpdate.com