Luxembourg-based steel manufacturer ArcelorMittal has reportedly agreed a deal with French officials to invest €1.8bn ($1.97bn) to cut greenhouse emissions at its steel plant in Dunkirk, northern France.

According to the officials, cited by Reuters yesterday (14 January), the French government will offer ArcelorMittal a subsidy package of up to €850m. The package was cleared by the European Commission in July last year, alongside €2bn in aid for Thyssenkrupp, a German engineering and steel producer with over €41bn in revenue in 2022.

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The financial stimulus will help ArcelorMittal buy electric furnaces and build a direct reduction plant. The move will cut French carbon emissions from the industrial sector by 5.7%, it is claimed.

ArcelorMittal is a metals and minerals giant known for its prolific international expansions. According to GlobalData’s FDI Projects Database, the company has been the most active greenfield investor in the metals and minerals sector in the past four years.

Greenfield investment takes place when a company establishes a new physical presence or expands an existing operation abroad. Between Q1 2019 and Q3 2023, 64.4% of ArcelorMittal’s direct investments went into the iron, steel and ferroalloys subsector.

However, in December, the company sold its Kazakh subsidiary to officials in Astana following a series of fatal accidents, including a coal mine fire in October, which killed at least 42 workers. Under the agreement, ArcelorMittal received consideration of $286m and an additional $250m as repayment of outstanding intra-group dues.

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News about the French government subsidy package comes at a time when one-fifth of EU emissions comes from industrial production. According to a report by global consulting business ICF International, iron and steel accounted for the second highest contribution to EU industrial carbon emissions, with 659Mt of carbon dioxide released in the atmosphere between 2010 and 2021.