Ontario, Canada, invests in clean steelmaking technology to support future of auto sector

HAMILTON, CANADA – ArcelorMittal Dofasco and the Ontario government are joining forces on a once-in-a-generation investment to transform the province into a world-leading producer of green steel that will boost the province’s robust auto parts supply chain and skilled workforce in communities with deep roots in steel manufacturing to help meet the global demand for low-carbon auto production.

The approximately $1.8 billion project by ArcelorMittal Dofasco will see its Hamilton facility among the first of its global operations to replace coal-fed coke ovens and blast furnaces with new, low-emission technology. The move to a hydrogen-ready direct reduced iron fed electric arc furnace (EAF) would take advantage of Ontario’s clean electricity supply to eliminate the use of coal and coke from ArcelorMittal Dofasco’s steelmaking process, which is one of the largest sources of greenhouse gas emissions in the province.

The Government of Ontario is contributing up to $500 million in loan and grant support to the project, which will reduce carbon dioxide (CO₂) emissions by about three million tonnes annually. The CO₂ reduction is equivalent to taking almost one million cars off the road. The shift to “green steel” technology is critical as large automakers and other major manufacturers around the world look to reduce emissions along all their supply chains.

Phase 2 of Driving Prosperity ― The Future of Ontario’s Automotive Sector, demonstrated the government’s commitment to transform the province’s automotive supply chain to build the cars of the future. That commitment includes supporting the shift to low-carbon steel production that will give Ontario a competitive advantage in attracting game-changing investments, create and retain skilled, local jobs for Ontario workers, and help the province meet its greenhouse gas emissions target by 2030.

“Not only is this investment great news for the people of Hamilton, this is great news for people across the province as we take another step towards making Ontario a global innovation hub for building the car of the future,” said Premier Doug Ford. “By investing in innovative technologies, we’re strengthening our economy and protecting good local jobs for Ontario workers.”

“Reducing ArcelorMittal’s CO₂ emissions intensity worldwide by 25% by 2030 is an ambitious target for a steel and mining company; but we believe it is achievable and that it is our responsibility to invent or innovate the processes and technologies that will enable us to reach that goal,” said John Brett, CEO North America, ArcelorMittal. “As part of that, we understand that in the coming years, the assets used to make steel will undergo a transformation on a scale not seen for many decades.”

“This investment puts us on a path to low-carbon, sustainable steel and is possible only through partnership with government,” said Ron Bedard President and CEO, ArcelorMittal Dofasco. “All options for the newest, most advanced technology that achieves maximum carbon reduction for steelmaking, enhanced product capability and quality, and advanced manufacturing employment opportunities were explored. Extensive benchmarking and modelling were also completed in preparing the ultimate plan for the sustainability of the environment, the company, employees, customers, and the community.”

“From day one, our government’s plan has been to unleash Ontario’s economic potential and attract investment by making the province an attractive place to do business once again – and by lowering taxes, reducing electricity costs and red tape, we have reduced the cost of doing business in Ontario by nearly $7 billion a year,” said Vic Fedeli, Minister of Economic Development, Job Creation and Trade. “This exciting investment in innovative green-steel manufacturing with ArcelorMittal Dofasco will give automakers and other industries yet another reason to buy Ontario and hire Ontario workers when they look to transform their supply chain.”

Ontario is home to one of the cleanest electricity grids in the world, with more than 90 per cent of the province’s electricity generation producing zero emissions. At the same time our government has made significant investments to reduce electricity prices for industrial customers, including through the Comprehensive Electricity Plan which has reduced costs by about 15 per cent. This investment in clean steel making will take advantage of that clean and now affordable electricity supply giving ArcelorMittal Dofasco a competitive advantage as businesses look to reduce emissions in their supply chain.

“As companies like ArcelorMittal Dofasco make significant investments to electrify and reduce emissions, they do so knowing they can rely on Ontario’s clean and affordable electricity system giving them a competitive advantage,” said Todd Smith, Minister of Energy. “Our government is proud to support this expansion of clean steelmaking that will support local jobs in Hamilton. We will continue to build on our significant investments that have reversed the trend of skyrocketing electricity prices as we continue to make Ontario an even better place to do business.”

In cooperation with the federal government, Ontario’s domestic steel industry and its customers, including major automotive, mining, energy, and construction companies, are working together to reduce the environmental impact of their operations and products. This investment will significantly reduce the province’s greenhouse gas emissions (helping move the province toward its 2030 target) and accelerate the province’s pivot to carbon-neutral manufacturing. Ontario’s investment will match the Government of Canada’s investment in the project, announced in July 2021. The goal is to have the project completed by 2028.

Quick Facts

ArcelorMittal Dofasco has produced steel in Hamilton for more than 100 years.
The company is Canada’s largest flat-rolled steel producer, and Hamilton’s largest private-sector employer, employing about 4,600 people.
ArcelorMittal Dofasco’s parent company, ArcelorMittal, is the world’s second-largest steel company, with primary steelmaking facilities in 17 countries.
The province’s vehicle assembly facilities are supported by a supply chain comprising over 700 parts firms and over 500 tool, die, and mold makers.
The Government of Canada announced a federal investment of $400 million to support ArcelorMittal Dofasco’s adoption of innovative low-carbon technology.
Despite COVID-19 and global supply chain issues, vehicle assembly and auto parts production directly supports nearly 100,000 Ontario jobs, with hundreds of thousands more spin-off jobs in communities across the province.
Recent investments over the past year of almost $6 billion in Ontario assembly operations include around $4 billion in transformative investments in electric vehicle production.
Ontario is the only place in North America where five major automakers build vehicles —Ford, General Motors, Honda, Stellantis and Toyota — as well as truck manufacturer Hino.
Ontario has committed $56.4 million over the next four years through the Ontario Vehicle Innovation Network to support innovation and transformation in our auto tech system.