ArcelorMittal to Construct Biofuel Production Facility - Analyst Blog
Steel giant ArcelorMittal MT, carbon recycling company LanzaTech and leading technology and service provider Primetals Technologies have signed a letter of intent to build Europe’s first-ever commercial scale production facility.
The facility will create bioethanol from waste gases produced during the steelmaking process, which can reduce greenhouse gas emissions by over 80% compared with conventional fossil fuels. The €87 million worth project will be located at ArcelorMittal’s steel plant in Ghent, Belgium, The construction is expected to begin in late 2015, with bioethanol production expected to start by mid-2017.
ArcelorMittal will seek finance from a number of different sources. A total of €10.2 million has been secured under the European Union’s 2020 Horizon program for research and development and talks are underway with potential equity and debt partners.
The ethanol/annum project will have total annual capacity of 47,000 tons, sufficient to fuel half a million cars with ethanol blended gasoline. The plant will also have the added value of recycling waste streams not only by cutting emissions at source, but by keeping fossil fuels in the ground through the production of commodity chemicals and fuels that would otherwise be made from oil.
Once construction is complete and commercial viability of the project is proven, ArcelorMittal intends to build further plants across its operations. The company has been working on the project for a few years and has established a long-term partnership with LanzaTech. LanzaTech’s carbon recycling technology recycles the waste gases and ferments them with a proprietary microbe to make bioethanol.
The companies are looking forward to cut carbon dioxide emissions. The steel-making process results in the emission of high levels of waste gases. The new technology will enable the companies to convert some of these waste gases into fuels that provide considerable environmental benefits.
Primetals Technologies will be responsible for engineering, automation, key equipment and commissioning.
ArcelorMittal currently has a Zacks Rank #4 (Sell).
Better-ranked companies in the steel space include Schnitzer Steel Industries, Inc. SCHN, Commercial Metals Company CMC and Evraz Highveld Steel & Vanadium Ltd. HGVLY. While Schnitzer Steel sports a Zacks Rank #1 (Strong Buy), Commercial Metals and Evraz Highveld Steel carry a Zacks Rank #2 (Buy).
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