The federal government has announced $400 million for a project at ArcelorMittal Dofasco that the company says will help cut carbon emissions by more than half.
Deputy Prime Minister Chrystia Freeland, along with Minister of Innovation François-Philippe Champagne and Minister of Labor Filomena Tassi, made the announcement at the Hamilton steelmaker on Friday.
The government said its investment is part of a $1,765 billion project to phase out coal-fired steel production and is expected to reduce greenhouse gas emissions by up to three million tons per year by 2030. The target is for the project to be completed by 2028.
“This is a historic day for Hamilton,” said Tassi, MP for Hamilton West-Ancaster-Dundas, who spent summers at Dofasco as a student. “A transformational day.”
Dofasco plans to use the funds to switch to electric arc furnaces, which use scrap metal, electricity and natural gas to make steel, as opposed to blast furnaces that use coal and iron ore. Officials said the retrofit would create 2,500 construction jobs and “secure” thousands of jobs “for years to come” in Dofasco.
Champagne said the new furnaces will keep the company in a leading position as the world moves away from fossil fuels, helping Canada become a global leader in clean steel and maintaining its steelmaking businesses in Hamilton. He also described the funds as “largely repayable”.
“A green recovery… is what the markets are looking for, what customers are demanding, and what we want to support as a government,” he said. “The world steel industry emits seven percent of global emissions equal to global aviation, shipping and chemistry. [industries’] emissions were combined, so … we had to act.”
Ontario funding talks continue
According to Tony Valeri, ArcelorMittal Dofasco’s vice president of corporate affairs, the project also depends on funding from the state government. These discussions are ongoing and have been “positive,” he added, adding that he expects them to continue.
ArcelorMittal CEO Aditya Mittal said she looks forward to “stepping up” by the state government.
Earlier this month, Prime Minister Justin Trudeau announced $420 million for a similar project at Algoma Steel in Sault Ste. Marie, Ont.
At the time, Trudeau said a similar announcement would be made in Hamilton soon.
The funding, announced at Hamilton, comes from the Strategic Innovation Fund and Net Zero Accelerator.
The government said the combined reduction in greenhouse gases from both projects would reduce emissions by up to six million tons per year.
That’s the equivalent of taking 1.8 million vehicles off the road, “almost the total passenger car count in Toronto, Montréal and Vancouver,” according to the publication.
‘New era in steel production’
Mittal, CEO of ArcelorMittal, said the announcement marks the “beginning of a new era of steelmaking at Hamilton that will result in a 60 percent reduction in CO2 emissions over the next seven years.”
Bianca Caramento, acting general manager of Mohawk College’s Center for Climate Change Management, said the project puts Hamilton in a good position to meet emissions reduction targets.
He said the city aims to reduce emissions by 50 percent by 2030, so completing this project by 2028 would be extremely effective.
The three million tons annual reduction would be an almost 30 percent reduction in Hamilton’s overall emissions. It’s a piece of the puzzle, but a very big piece.– Bianca Caramento, Mohawk College Center for Climate Change Management
“A reduction of three million tonnes per year would be an almost 30 percent reduction in Hamilton’s overall emissions,” he said. “It’s a piece of the puzzle, but a very big piece.”
AcelorMittal Dofasco said Hamilton contributes 4.8 tons of 11 million tons of current annual greenhouse gas emissions.
Prior to the announcement, company spokesperson Marie Verdun described carbon-free steel production as “the centerpiece of ArcelorMittal’s long-term strategy”. He pointed out that the company has already started working on this issue in its European operations.
ArcelorMittal Dofasco says the new furnaces can then be used to switch to hydrogen fuel, a process that can produce net zero emissions depending on the source of hydrogen and electricity used, leaving only water vapor as a byproduct. Champagne said Dofasco could be the first plant in the world to be activated for hydrogen.
“It’s very forward-looking that they have adopted a technology that can accommodate hydrogen in the future,” Caramento said.
‘Huge improvement’ for air quality
Bruce Newbold, head of Clean Air Hamilton and professor of geography at McMaster University, said the company’s phasing out coal would mean a “massive improvement” for local air quality.
“This will mean not only a reduction in greenhouse gas emissions, but also a reduction in other air pollutants,” he told CBC Hamilton on Friday.
“The vast majority of Hamilton’s air emissions are associated with industry and the burning of fossil fuels, including coal…. We can expect to see improvements in the level of pollutants such as sulfur dioxide, nitrogen dioxide and particulate matter.”