ArcelorMittal Reduces 2030 Emissions Targets Amidst Climate Concerns

World’s second largest steelmaker weakens 2030 emissions targets

ArcelorMittal has cut its 2030 emissions reduction target by more than half. The company originally pledged to reduce emissions intensity by 25% globally and 35% across European operations from 2018 levels. However, the firm now commits only to a 10% global reduction in Scopes 1 and 2 emissions intensity by 2030.

This represents a significant retreat from earlier commitments. The revised target covers only finalized projects, with the company citing competitiveness pressures, high energy costs, inflation, and policy uncertainties as justification. Reports from SteelWatch and independent analysts have questioned whether ArcelorMittal can still reach its longstanding net zero by 2050 goal.

For UK businesses working with steel suppliers or facing their own decarbonization requirements, this development highlights the practical difficulties heavy industry faces. It also raises questions about supply chain emissions reporting and the reliability of supplier climate commitments.

Original commitments set out in 2021 Climate Action Report

ArcelorMittal laid out its decarbonization strategy in its 2021 Climate Action Report. The plan committed to a 25% reduction in global emissions intensity, measured as CO₂ per tonne of steel, by 2030 from a 2018 baseline. European operations faced a more ambitious 35% target.

The roadmap emphasized several technological pathways. These included clean power steelmaking using hydrogen and electrolysis, circular carbon steelmaking via biomass, and electric arc furnaces. In 2020, the company aligned with the European Green Deal, targeting a 30% emissions cut for its Europe Flat Products division by 2030 and carbon neutrality across Europe by 2050.

The World Steel Association noted ArcelorMittal’s plans for major infrastructure projects. These included a 2.5 million tonne direct reduced iron plant and two electric arc furnaces at its Belgium site. The company projected these would deliver 3.9 million tonnes of CO₂ savings annually by 2030.

ArcelorMittal also committed to validate its targets through the Science Based Targets initiative within two years. That deadline has passed without validation.

Production declines mask limited intensity improvements

The company’s emissions intensity has fallen from approximately 2.02 tonnes of CO₂ per tonne of steel in 2018 to 1.79 tonnes by 2025. This represents roughly a 5.4% reduction globally and 5.0% in Europe. However, these figures fall well short of the pace required to meet original targets.

Absolute emissions across Scopes 1 and 2 have fallen 47% since 2018. Nevertheless, this reduction stems largely from lower production volumes and asset sales rather than process improvements. Crude steel output has dropped 37% while capacity has declined 32% over the same period.

ArcelorMittal has invested $1 billion in decarbonization projects between 2021 and 2024. This falls significantly below initial plans. Several European direct reduced iron and electric arc furnace projects have been paused. The company cites high green hydrogen costs, uncompetitive natural gas pricing for direct reduced iron, and absent carbon capture infrastructure as reasons for delays.

Projects at Sestao in Spain remain on hold. In November 2024, the company admitted it was increasingly unlikely to meet 2030 targets. SteelWatch’s analysis found annual progress of less than 1% against the 3% per year needed to reach original goals.

Joint ventures excluded from reduction commitments

ArcelorMittal’s joint venture operations are not included in its emissions targets. AM/NS India, for example, emitted over 10 million tonnes of CO₂ in 2024, with ArcelorMittal’s share representing a substantial portion. Projections suggest these joint venture emissions could exceed 25 million tonnes annually by 2026.

This exclusion creates a significant gap in the company’s climate accounting. For businesses assessing supply chain emissions under Scope 3 reporting requirements, this matters. Steel purchased from ArcelorMittal joint ventures may carry higher embedded emissions than the parent company’s stated intensity figures suggest.

The revised 2030 target focuses only on finalized projects. Consequently, it excludes planned investments that lack confirmed funding or policy support. ArcelorMittal stated in its 2025 sustainability report that progress beyond 2030 will depend heavily on policy support, technological advancement, and market conditions.

What this means for UK manufacturers and procurement teams

Steel production accounts for 7% to 9% of global CO₂ emissions. Most steel manufacturing relies on coal-based blast furnaces, which are inherently carbon intensive. Transitioning to lower carbon methods requires substantial capital investment and supportive policy frameworks.

UK businesses face several implications from ArcelorMittal’s revised targets. Firstly, companies reporting Scope 3 emissions need accurate data from steel suppliers. When major suppliers weaken their commitments, it becomes harder to demonstrate credible supply chain decarbonization. This affects carbon reporting compliance for PPN 06/21 and similar requirements.

Secondly, the EU Carbon Border Adjustment Mechanism begins applying carbon costs to steel imports from 2026. Suppliers who fail to reduce emissions will face additional costs. These costs will likely flow through to purchasing businesses. Companies with international supply chains should assess whether their steel suppliers face competitiveness risks under this regime.

Thirdly, public sector suppliers must demonstrate sustainable procurement practices when bidding for contracts. Central government procurement requires credible net zero plans. When steel suppliers backtrack on commitments, it weakens the environmental credentials of any project using their materials.

Industry-wide challenges affect decarbonization timeline

ArcelorMittal is not alone in facing these difficulties. The entire steel sector confronts similar pressures. High energy costs in Europe, particularly for natural gas and electricity, make clean steelmaking technologies economically challenging. Green hydrogen, essential for direct reduced iron production, remains expensive and in limited supply.

Policy uncertainty compounds these issues. Steelmakers need long-term visibility on carbon pricing, subsidies for clean technology, and infrastructure for carbon capture and storage. Without coordinated support, individual companies struggle to justify multi-billion pound investments in unproven technologies.

Asian steel producers often operate with lower energy costs and less stringent environmental requirements. This creates competitive pressure. European steelmakers argue that aggressive decarbonization targets risk shifting production to higher-emission regions rather than reducing global emissions.

However, lagging on emissions reduction carries risks too. The EU Carbon Border Adjustment Mechanism will increase costs for high-carbon steel. Customer demand for low-carbon materials is growing, particularly in construction and automotive sectors. Companies that delay investment in clean steelmaking may find themselves at a commercial disadvantage.

Current progress against decarbonization requirements

To align with 1.5°C climate pathways, steel producers need to cut emissions intensity by approximately 3% per year. ArcelorMittal’s current pace of less than 1% annually falls well short of this requirement. Moreover, the company’s reliance on production cuts rather than technological improvements means intensity gains may not continue as demand recovers.

ArcelorMittal maintains its net zero by 2050 commitment. Nevertheless, without clear milestones and intermediate targets, this long-term goal lacks credibility. SteelWatch described it as a target without milestones, noting the absence of concrete steps to bridge the gap between current performance and stated ambitions.

The company dropped its commitment to Science Based Targets initiative validation after the 2023 deadline expired. This removes independent verification of whether its plans align with climate science. For businesses evaluating supplier commitments, this absence of third-party validation makes assessment more difficult.

Key facts about ArcelorMittal’s revised climate targets

• ArcelorMittal cut its 2030 global emissions intensity reduction target from 25% to 10% against the 2018 baseline.
• The European-specific target of 35% has been effectively dropped, with no regional targets stated in the revised commitment.
• Emissions intensity has improved by just 5.4% globally and 5.0% in Europe since 2018, requiring a threefold acceleration to meet even the weakened target.
• Absolute emissions fell 47% since 2018, but this reduction reflects a 37% drop in crude steel production rather than process improvements.
• Joint venture operations such as AM/NS India are excluded from targets despite emitting over 10 million tonnes of CO₂ annually.
• The company invested $1 billion in decarbonization between 2021 and 2024, below original plans, with multiple European projects now on hold.
• ArcelorMittal withdrew its Science Based Targets initiative commitment after failing to achieve validation by the 2023 deadline.

What UK businesses should consider about steel supply chains

Companies purchasing steel or steel-intensive products should review their supply chain emissions data. When major suppliers revise their targets downward, it affects your Scope 3 calculations. Therefore, you may need to update your own emissions baselines and reduction trajectories.

Consider asking steel suppliers for detailed emissions data at the product level. Aggregate company targets do not always reflect the carbon intensity of specific materials. Furthermore, verify whether joint venture operations are included in reported figures. As shown by ArcelorMittal’s approach, significant emissions sources may sit outside published targets.

For businesses tendering for public sector contracts, demonstrating a credible supply chain decarbonization plan matters. When suppliers weaken their commitments, it creates risk for your bid credibility. Consequently, diversifying your supply base or seeking suppliers with stronger climate performance may reduce this risk.

The transition to low-carbon steel will take years. Electric arc furnace steel, which uses recycled scrap, typically has lower emissions than blast furnace steel. However, it cannot meet all technical specifications. Similarly, hydrogen-based direct reduced iron shows promise but faces cost and infrastructure barriers. Understanding these technical constraints helps set realistic expectations for supply chain decarbonization timelines.

Policy gaps slow heavy industry transition

ArcelorMittal explicitly cites policy uncertainty as a barrier to meeting its original targets. Heavy industry decarbonization requires coordinated government support across several areas. These include subsidies for clean technology deployment, contracts for difference to bridge cost gaps, and infrastructure investment in hydrogen production and carbon transport networks.

The UK government’s industrial decarbonization strategy outlines support mechanisms. However, the pace and scale of implementation remain uncertain. Steel producers need long-term price certainty for low-carbon inputs before committing to billion-pound plant conversions. Similarly, carbon capture and storage infrastructure requires state backing to achieve the scale necessary for industrial users.

Businesses should engage with industry consultations on these policy frameworks. Your input on practical requirements, cost impacts, and implementation timelines helps shape effective support mechanisms. Additionally, training on policy developments helps your team anticipate regulatory changes and plan accordingly.

Sector outlook and competitive dynamics

The steel industry faces a complex transition period. Companies that invest early in low-carbon production gain a technical lead but carry higher costs in the near term. Those that delay preserve margins but risk losing customers seeking lower-carbon materials. This dynamic creates uncertainty for purchasers trying to balance cost, supply security, and emissions performance.

Global steel overcapacity adds another dimension. When demand is weak, producers compete primarily on price. This makes it harder to command a premium for low-carbon steel. As economic conditions improve and carbon pricing mechanisms strengthen, the commercial case for clean steel should become clearer. However, the timing and strength of this shift remain uncertain.

UK manufacturers need to monitor these developments closely. Changes in steel pricing, availability of low-carbon grades, and supplier financial viability all affect your operations. Building relationships with multiple suppliers and staying informed about technological progress helps manage these risks. Our net zero resources provide updates on industrial decarbonization and supply chain developments.

Independent reporting and accountability

SteelWatch, an independent campaign organization, published a detailed report titled Backtracking on Climate Action. The analysis documented ArcelorMittal’s target revision and compared stated commitments against actual progress. This type of independent scrutiny provides valuable context for businesses evaluating supplier claims.

When assessing supplier commitments, look for third-party verification. Science Based Targets initiative validation, carbon disclosure through CDP, and independent audits all add credibility. Conversely, the absence of these validations or withdrawal from commitment processes signals potential reliability issues.

ArcelorMittal’s decision not to pursue Science Based Targets validation matters because it removes independent assessment of whether plans align with climate science. For businesses with their own science-based targets, this creates complexity. You need to demonstrate that your Scope 3 reductions are credible, which becomes harder when major suppliers lack validated targets.

Where to find authoritative information on steel sector decarbonization

Several authoritative sources provide information on industrial decarbonization and steel sector developments. The Department for Energy Security and Net Zero publishes updates on industrial decarbonization policy and funding programs.

The Environment Agency oversees industrial emissions permits and provides guidance on reporting requirements. Their resources help businesses understand regulatory obligations for emissions monitoring and reporting. Additionally, the World Steel Association tracks industry progress on climate action and publishes data on production technologies and emissions intensity across different steelmaking routes.

For policy analysis and industry developments, BusinessGreen provides detailed coverage of corporate climate commitments and regulatory changes affecting UK businesses. Their reporting helps contextualize individual company decisions within broader sector trends.