Inside Clean Energy: A Steel Giant Joins a Growing List of Companies Aiming for Net-Zero by 2050

ArcelorMittal produces more steel than any other company. It is also taking a leading role in developing technologies to reduce CO2 emissions from steel-making.

Steel is produced at ArcelorMittal Gent on Sept. 5, 2007 in Ghent, Belgium. Credit: Mark Renders/Getty Images
Steel is produced at ArcelorMittal Gent on Sept. 5, 2007 in Ghent, Belgium. Credit: Mark Renders/Getty Images

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Inside Clean Energy

One of the greatest challenges in the fight against climate change is figuring out a clean way to make steel.

We’re talking about a skyscraper-sized challenge with foundational stakes, because steel is essential for our economy but it is also responsible for 8 percent of the world’s carbon emissions, according to one estimate.

So it’s a huge deal that the world’s largest steel company, ArcelorMittal, said last week that it is setting a target of net-zero emissions by 2050.

“If the world is to achieve net-zero by 2050 it will require all parts of the economy in all regions of the world to contribute,” Aditya Mittal, ArcelorMittal’s president and chief financial officer said last week at the Financial Times Commodities Conference.


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The most common process for making steel uses a blast furnace followed by a “basic oxygen” furnace. In the blast furnace, extremely hot air is injected into a continuous feed of iron ore, purified coal and lime. This removes oxygen from the iron and imbues the iron with carbon, producing “pig iron” or raw iron. The pig iron is then fed into the basic oxygen furnace, which blows oxygen into the molten iron to reduce the carbon content and remove impurities, resulting in liquid steel. (ArcelorMittal explains this on its website. Industry groups have their own explainers, including this one.)

While that’s the process for forging new, or “primary” steel, there is a process for making recycled steel that produces lower emissions. Producers use electric arc furnaces to heat scrap steel and purify it into liquid steel. This has low emissions if the electricity comes from zero-carbon sources. 

But the industry cannot simply move to relying on electric arc furnaces because it needs a method that is capable of making primary steel.

ArcelorMittal named two processes that it is exploring:

  • The first is called “hydrogen-DRI,” with the DRI standing for “direct reduced iron.” In this method, the company uses hydrogen to set off a chemical reaction that removes oxygen from the iron ore. ArcelorMittal is currently using natural gas as the feedstock for synthesizing hydrogen, which produces carbon dioxide, but the company’s long-term plan is to use hydrogen produced from water. ArcelorMittal has a demonstration project for this technology in Hamburg, Germany, that is scheduled to open in 2023.

  • The second is something ArcelorMittal calls “smart carbon,” which uses a blast furnace but captures the carbon given off in the process. The goal is to stop carbon dioxide from being released into the atmosphere and store it for resale to the chemical and plastics industries. The company has several demonstration projects for this technology scheduled to go online in 2022.

Of the two methods, the company says carbon capture is the closest to being commercially viable, and probably would be relied upon to reach a goal the company set previously, of cutting its European emissions by 30 percent from 2018 levels by 2030.

To better understand all of this, I got in touch with Jeffrey Rissman, industry program director at the think tank Energy Innovation. He was the lead author of a paper I wrote about in April that looked at how heavy industry could get to net-zero emissions by 2070.

“I am glad they are announcing a 2050 net-zero goal,” Rissman said.

But he said he is skeptical of the idea that there will be a large market for selling carbon captured from making steel. This is because buyers would need to expend large amounts of energy to convert the carbon into useful chemicals, and the buyers have less expensive options. Another market for carbon is the oil industry, which injects carbon dioxide into the old oil fields to help produce more oil, although ArcelorMittal doesn’t mention this as a potential market.

Global Steel Leaders

Rissman also said he wondered how much of ArcelorMittal’s plan hinges on selling carbon, and how it would affect the 2050 goal if there was little demand for the carbon.

In announcing the 2050 net-zero goal, ArcelorMittal also called on governments to set up “a global level playing field” that would make it financially viable for companies to make the investment needed to pursue low-emissions strategies. One potential policy is border adjustment tariffs, which would add to the costs of imports from countries that do not have rigorous rules on emissions.

While the announcement doesn’t mention China, the call for a level playing field hints at one of the big tensions in the industry: Companies operating in Europe face escalating pressure from their governments to reduce emissions, while China, which produces about half of the world’s steel, has not exerted the same kind of pressure. However, China’s government did say last month that it intends to become carbon neutral by 2060.

ArcelorMittal is not well known in the United States, despite having substantial assets here (more on that in a minute). The company was formed in 2006 when an upstart steel magnate from India, Lakshmi Mittal, engineered a merger between his family-owned Mittal Steel with the European steel giant Arcelor.

In 2019, ArcelorMittal produced 97.3 million tons of steel, continuing its status as the world leader. The company also has been a leader in research into how to reduce the carbon footprint of steelmaking, with demonstration projects for several leading technologies and membership in the Energy Transitions Commission, a think tank that has been a leader in research on and advocacy for reducing emissions from heavy industry.

“As the world’s leading steel company, we believe we have a responsibility to lead the efforts to decarbonize the steel-making process, which today has a significant carbon footprint,” said Aditya Mittal last week.

What Does ArcelorMittal’s Goal Mean for the United States?

Days before announcing the net-zero goal, ArcelorMittal made another big announcement about the sale of most of its U.S. steel plants.

The company is a big player in the U.S. steel market, and owns parts of the former Bethlehem Steel empire, among other steel companies.

But ArcelorMittal has chosen to sell nearly all of its U.S. properties to Ohio-based Cleveland-Cliffs Inc., for $1.4 billion.

ArcelorMittal said it will continue to be a player in the North American market through plants in Mexico and Canada, plus a few assets it is keeping in the United States, and through a minority ownership stake in Cleveland-Cliffs.

So why did the company do this, and was it connected to the net-zero announcement that came a few days later?

President Barack Obama talks with employees as he tours the ArcelorMittal Cleveland steel mill in Cleveland, Ohio, on Nov. 14, 2013. Credit: Jim Watson/AFP via Getty Images
President Barack Obama talks with employees as he tours the ArcelorMittal Cleveland steel mill in Cleveland, Ohio, on Nov. 14, 2013. Credit: Jim Watson/AFP via Getty Images

Jeffrey Rissman of Energy Innovation told me he doubted that the sale and the net-zero plan were “causally related,” but he did note that this means most of the U.S.-based assets are not part of the net-zero plan since they’re no longer under the control of ArcelorMittal.

He thinks the sale had more to do with financial considerations like reducing debt.

While Cleveland-Cliffs hasn’t made a net-zero pledge, its CEO, Lourenco Goncalves, has been enthusiastic in talking about the importance of the company and industry reducing their emissions.

“The era of clean steel in the United States is starting right now,” said Goncalves, in an interview last week with Bloomberg. “And another thing—it’s not going to happen in 10 years: it’s going to start next year.”

Goncalves didn’t go deeply into specifics, but his comments help to address concerns that Cleveland-Cliffs might take a very different approach to emissions than ArcelorMittal.

The Trump administration has worked against policies to reduce emissions at the same time that most of the world’s other leading economic powers are heading in the opposite direction.

NextEra’s Market Value Is Now About the Same as ExxonMobil’s

NextEra Energy is growing, with a portfolio of renewable energy projects, while ExxonMobil is shrinking under the weight of debt and low oil and gas prices.

The result is a convergence that would have seemed unimaginable a few years ago: NextEra Energy’s market capitalization—the dollar value of its shares multiplied by the number of shares—has now risen enough to surpass ExxonMobil’s.

As I’m writing this, NextEra is worth $145.4 billion and ExxonMobil is worth $141.7 billion. NextEra pulled ahead for the first time last week, fell behind for a few days, and now is ahead again.

NextEra Rising, ExxonMobil Falling

To help understand what’s happening, I reached out to Kathy Hipple, a financial analyst for the Institute for Energy Economics and Financial Analysis, a think tank that does research to support the energy transition.

“Fundamentally, we are in the midst of an energy transition that is accelerating and Covid has accelerated it, but this energy transition has been underway for at least a decade,” she said. “Simply from a financial standpoint, Exxon really does represent the past.”

Underscoring her point, Bloomberg reported this week on internal documents from ExxonMobil that showed the company planned a major increase in annual carbon emissions between now and 2025. ExxonMobil responded to the story by saying the documents did not show measures the company was taking to reduce emissions or include company plans that have since changed.

Hipple noted that market value is a forward-looking indicator, showing investors’ expectations for future growth and confidence in a company’s management. 

Florida-based NextEra’s foundation is its utility business, which includes Florida Power & Light, among other local utilities. But most of its growth is coming from its NextEra Energy Resources subsidiary, which describes itself as the world’s largest operator of wind and solar projects.

“The market is telling us that they do not see the growth coming from oil and gas companies,” Hipple said. “This is not to say that oil gas companies will go away tomorrow, but the future growth will not come from that sector.”

To underscore how much the market has shifted, look back to 2007, when ExxonMobil was hitting its record market value of more than $500 billion. NextEra, which was then called FPL Group, was worth less than $30 billion.

Add One More to the Net-Zero Utilities List

I wrote last week about how Ameren and Entergy were joining other large U.S. utilities that have pledged to get to net-zero emissions by 2050 or sooner, and how this kind of goal is the new normal for the sector.

Just a few days later, another company joined the club: National Grid.

National Grid US provides electricity to 3.4 million electricity customers and 3.7 natural gas customers in Massachusetts, New York and Rhode Island.

This announcement was different from many of the others because National Grid is including its natural gas side in the net-zero pledge, and says that it is aiming to eliminate emissions from the use of its products, including natural gas. Also, National Grid owns only a few power plants, so it doesn’t have much work to do to eliminate emissions from generating electricity, which is the main challenge for many other utilities.

National Grid is one of the companies involved with a proposed transmission line that would deliver hydroelectric power from Quebec to Massachusetts.

“We don’t have all the answers yet, and the path to both increase renewable energy and decarbonize heat will be challenging,” said Badar Khan, president of National Grid US. “We believe our electric and gas networks have a vital role in helping achieve net zero emissions and our announcement today is the beginning of a transformative journey of our business.”

The company, which is a subsidiary of National Grid in the United Kingdom, talks about using so-called “renewable natural gas” and hydrogen to replace natural gas. As InsideClimate News has written, there is reason to be skeptical about the promise of renewable natural gas.

That said, National Grid’s announcement marks a step forward for natural gas utilities and is in line with a clear trend for electricity utilities.

Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to