A historic steelmaking transformation to end the use of polluting coal at ArcelorMittal Dofasco will go ahead after Ontario Premier Doug Ford announced $500 million in provincial funding for the “green steel” project.
The bayfront steelmaker announced a $1.8-billion proposal last year to replace its aging coke ovens and blast furnaces with electric arc furnaces by 2028 — a change that would dramatically cut cancercausing air pollution and black fallout in nearby Hamilton neighbourhoods.
The project would also cut greenhouse emissions from the city’s largest carbon polluter by nearly two-thirds — the equivalent of taking one million cars off the road — and pave the way toward hydrogen fuelled, “net-zero” steelmaking in future.
The federal Liberal government offered $400 million for the project in July 2021 — but international ArcelorMittal CEO Aditya Mittal warned at the time the project
would not go ahead without provincial funding.
Ford promised $100 million in grants and up to $400 million in conditional loans for the project at an announcement at Dofasco Tuesday, suggesting the company’s low-carbon steel would position Ontario as a go-to supplier for electric vehicle production and secure the future of 4,600 local steelworker jobs “for decades.”
“You already make some of the finest steel in the entire world right here in this great city,” Ford said. “And soon, not only will it be the best, it will be the cleanest.”
Mayor Fred Eisenberger called the project a “giant leap forward for our community” in not only fighting climate change, but also reducing historical air pollution woes in bayfront and beach strip neighbourhoods.
In addition to cutting carbon emissions, the project would drastically reduce the amount of cancer-causing pollution that has turned Hamilton’s airshed into a provincial hot spot for measurable benzene and benzo(a)pyrene.
Eisenberger said Hamilton’s steelmakers have made gradual environmental improvements over time, “but not using coal at all, or burning noxious fuels ... that will take it to a whole new level.”
Environment Hamilton head Lynda Lukasik celebrated the announcement — but also expressed hope that taxpayers footing half the $1.8-billion bill would spur greater “urgency” to end the use of coal even before 2028.
“We’ve been wondering and waiting and, frankly, we’ve been worried about whether or not this funding would come through,” she said ahead of the announcement, noting the Tory government’s early resistance to climate change-fighting policies like carbon pricing.
“I hope it spurs the company to step up and get this done faster, too.”
That’s the goal, said ArcelorMittal Dofasco CEO Ron Bedard at Tuesday’s announcement.
“Absolutely we’re aiming for better than 2028,” he said, adding the company is trying to work with government funders and suppliers “to accelerate (the project) at every opportunity we can, provided we can do it safely.”
Building a new electric arc furnace and “direct reduced iron” facility to replace coal-fired equipment will create an estimated 2,500 construction and engineering jobs.
The company said it will require 160,000 hours of training to help transition employees out of traditional, coal-fired steelmaking jobs and into more “technically advanced” manufacturing positions.
Right now, Dofasco has one of the largest industrial carbon footprints in Ontario at five million tonnes annually — slightly more than half the total emissions for all of Hamilton.
To start, the company will use natural gas to power electric arc furnaces and make steel. Later, the company hopes to switch to hydrogen to largely axe carbon emissions altogether — although wary environmentalists have pointed out not all hydrogen production is “green.”
Bedard is also registered to lobby city officials this year about decarbonization and “economic opportunities” for the steel sector.
Dofasco clarified Tuesday it is not seeking a city funding contribution, but noted municipal permitting could play a “critical role” in the steelmaker’s efforts to fast-track its project timeline.
The company’s proposed $1.8-billion overhaul includes:
Building a massive new electric arc furnace (EAF) and upgrading an existing furnace to make steel;
Building a “direct reduced iron” facility to turn mined ore into feedstock for an EAF using natural gas (and, someday, green hydrogen);
Mothballing two coke plants (where coal is currently ovenbaked into high-carbon coke);
Shuttering three blast furnaces (where coke is burned to transform iron ore into liquid iron); and
Ending the use and storage of coal.