ArcelorMittal Investing Nearly $400 Million in Eliminating Carbon Emissions

The world’s largest steel producer thinks it’s possible to make the vital alloy without also producing millions of tons of carbon emissions — and it’s spending hundreds of millions in hopes of proving it.

ArcelorMittal became a global titan under the direction of steel magnate Lakshmi Mittal, but his son and new chief executive Aditya Mittal tells the New York Times that the steel industry must change as policymakers weigh more taxes on carbon and wary investors eye forthcoming environmental regulations.

And he says his company has the scale and resources to lead the way. The report says ArcelorMittal is investing $390 million in several pilot programs in hopes of finding a solution.

In one initiative, at a plant in Germany, the company is testing the use of clean-burning hydrogen fuel, rather than the coal derivative coke, to produce steel.

At another mill in Belgium, large tanks are filled with bacteria to convert the carbon dioxide in exhaust into ethanol, which can, in turn, be converted into chemicals.

The younger Mittal hopes to slash carbon emissions at the company’s plants by the end of the decade and be carbon-neutral by 2050, but how to pay for it remains up in the air. The pilot programs account for a tiny fraction of ArcelorMittal’s annual revenue, but the steel industry’s profit margins are slim, and the cost of completely overhauling its mills would likely range into the tens of billions.

The steel industry continues to negotiate with governments about how best to clean up their operations, but the clock is ticking — particularly in Europe, where ArcelorMittal makes about half its steel. One analyst told the Times that emissions penalties could rise high enough to make steel production too costly in the E.U. within just a few years.