Hydrogen crisis calls into question steel industry transition

In the summer of 2025, news deeply shakes the European steel sector: ArcelorMittal, the continent's largest steel producer, decides to abruptly halt the project to convert its historic German plants to the production of "green" steel, i.e. steel obtained thanks to low-carbon hydrogen.

A choice that comes suddenly, but which has its roots in structural problems much deeper than one could have imagined even just a year ago.

The transition to a steel mill powered by green hydrogen had been enthusiastically welcomed by both the political and industrial worlds. Not only would it have allowed a drastic reduction in CO₂ emissions from one of the most energy-intensive and polluting sectors in Europe, but it also represented a concrete symbol of the shift towards decarbonisation promised by the European Union. ArcelorMittal had put itself forward as a trailblazer, announcing billion-dollar investments to convert traditional furnaces, powered by coal and gas, to furnaces capable of using hydrogen obtained from renewable sources.

However, what seemed like a horizon of innovation and sustainability soon collided with a much more complex and harsh reality. The production of green hydrogen on an industrial scale, in fact, has proven to be much more expensive and problematic than optimistic forecasts. On the one hand, the supply of hydrogen at competitive costs has not taken off, and the infrastructure needed to ensure a stable supply is still incomplete. On the other, the price of electricity, essential for the production of hydrogen through electrolysis, has reached record levels in Germany and many other European countries, making the transition to these new technologies uneconomical.

Added to this scenario is a variable that is too often underestimated in discussions on energy transition: the pressure of international competition. While Europe works to make its industry more sustainable, non-European producers continue to put low-cost steel on the market, often without stringent environmental constraints.

This dynamic puts European operators in serious difficulty, already struggling with heavy investments and increasingly reduced profit margins.

The decision to interrupt the reconversion plan does not mean a return to the past tout court. The company has in fact chosen to focus on a more tried and tested technology that is less exposed to the uncertainties of the hydrogen market: electric arc furnaces . These plants allow steel to be produced using mainly scrap metal and a smaller amount of energy than traditional furnaces, still contributing to the reduction of CO₂ emissions, even without reaching the “zero emission” levels dreamed of by the promoters of the green revolution.

This turn of events clearly highlights all the contradictions of the energy transition in the industrial sector. On the one hand, there is an environmental emergency that cannot be ignored; on the other, there is an undeniable need to guarantee the competitiveness, employment and survival of large European manufacturing companies. ArcelorMittal's abandonment of investments in green hydrogen is not just a temporary slowdown in an industrial project: it calls into question the entire model on which the decarbonisation policies of the old continent are based.

What emerges, therefore, is the need for a more pragmatic and less ideological approach. Without a framework of stable incentives, energy costs aligned with those of international competitors and effective protection tools against imports from countries with lower environmental standards, the risk is that European industry will be forced to choose between sustainability and survival, between green transition and job losses.

The ArcelorMittal story opens a reflection that goes far beyond industrial news. If the challenge of green hydrogen really wants to become a reality, we need to work more decisively both on technological innovation and on the creation of a fair and sustainable competitive environment. Only in this way can the promise of a European steel mill with almost zero emissions be transformed from a dream into a solid reality.

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