ArcelorMittal Dofasco has quietly extended its timeline by 22 years to phase out coal for “decarbonized” steelmaking, says a federal government document, aiming for 2050 instead of 2028.
Ontario’s largest emitter of greenhouse gases is also receiving $50 million more from the federal government for the project, according to an amendment posted to the Government of Canada’s website last March.
It was posted after the U.S. first imposed tariffs on Canadian steel and shortly before the federal election.
The change brings Ottawa’s total contribution to $450 million.
“The government has given the company a kind of loophole to continue its regular emissions for a much longer time,” said Evan Ubene with Environment Hamilton.
ArcelorMittal Dofasco said in a statement it has extended the timeline but its “ambitions and intentions” have not changed. The additional $50 million is needed for a “technical configuration change in the [direct reduced iron] module plans.”
Ubene said he happened to find the changes online, posted as an amendment, when searching for any sort of project update.
That’s in stark contrast to the high-profile media events in 2022, initially announcing the transition.
Then, company officials, the prime minister and Ontario premier all told reporters Dofasco would decommission its blast furnaces and coke plants in place of direct reduced iron technology (DRI) and electric arc furnaces (EAFs) — all by 2028.
The province and Dofasco also pledged money to the $1.8-billion project.
Instead of relying on coal, the steel plant would be fuelled by natural gas and eventually hydrogen, reducing greenhouse gas emissions by 60 per cent, as well as harmful airborne pollutants, officials said in 2022.
The Ontario Ministry of Economic Development, Job Creation and Trade said Dofasco has spent none of the money the province has set aside for EAFs, totalling $500 million.
“We continue to work closely with ArcelorMittal Dofasco and companies across the steel sector to ensure they are positioned to take advantage of domestic opportunities and find new markets for made-in-Ontario steel,” said spokesperson Christy Arnold.
Federal agency Innovation, Science and Economic Development Canada told CBC Hamilton it still expects Dofasco to transition from blast furnaces to EAFs and reduce emissions by three million tonnes a year — as originally planned.
The “only change,” said spokesperson Riyadh Nazerally, is that DRI production will not happen at Dofasco.
Instead, the iron will be produced at ArcelorMittal’s DRI facility in Contrecoeur, Que.
How this will impact jobs in Hamilton is unclear. The original project proposal said it would “maintain 4,600 full-time jobs within Canada.”
The amendment now says instead that the project will “support thousands of jobs during the engineering and construction phases.”
The federal government said the timeline was extended to reflect the “full contractional period” but that the project’s completion date remains 2028.
Dofasco did not say anything in its statement about DRI being done in Quebec instead.
The amendment has added “watered down and vague” language to what’s being proposed and when the changes will happen, said Ubene.
“Now, no one knows what’s really planned,” he said. “And when they keep delaying it, Hamilton residents have to keep breathing that air in.”
The original plan specified that the project will use the “more modern steelmaking practices” of DRI and EAFs.
But last year, the project was amended to say Dofasco will replace its furnaces and coke plants but doesn’t specify with what.
It remains unclear if Dofasco will continue to produce some iron using its coke plants in Hamilton, or get all it all from Quebec.
“It is very concerning that this language [of DRI and EAFs] seems to have been removed and makes the scope of the project agreement unclear,” said Ubene.
“The government should be directing public funds towards workers to support them in a transition away from fossil fuels, but here they are giving public funds to a billion-dollar company and making it very easy for that company to avoid doing the right thing.”
While the project is still aiming to reduce greenhouse gas emissions by the same amount, Ubene said that’s impossible if Dofasco continues to rely on coal.
At a community meeting last October, Dofasco told the public that its “decarbonization project” has gone through several engineering phases and it is proceeding with “extreme caution” because of the U.S. tariffs on Canadian steel.
It said there were no “major updates” at the time, even though the amendment had gone through, unannounced, eight months before.
Jochan Bezner, a longtime citizen member of Dofasco’s community liaison committee, said he was never informed of the “major” project changes despite attending quarterly meetings with the steelmaker.
“At this point [Dofasco] as well as the federal government owes Hamilton an answer and clarification regarding what all of this means going forward,” Bezner said.
The next community meeting with Dofasco will take place on Jan. 20.
