This week, as Lakshmi Mittal looked back on the 20 years since ArcelorMittal’s creation, he described the end of an era. In 2006, the combination of Mittal Steel and Arcelor captured the spirit of the time: globalization. For a fragmented industry, the answer was scale. For regional cycles, diversification. For squeezed margins, global efficiency.
ArcelorMittal was born as the world’s largest steelmaker and as one of the most ambitious expressions of that logic: producing across continents, selling into multiple value chains and capturing growth wherever it emerged. Communication around the merger was done by BlackBerry, the Indian businessman recalled. The iPhone would arrive only the following year.
But technology is the detail. The central point of his speech at the Global Steel Dynamics Forum in New York was different: in 2006, few were talking about China as the world’s dominant steel producer, decarbonization or artificial intelligence. Today, those three themes define the sector.
China is the first rupture. Its exponential expansion and the flow of steel produced below economic cost into global markets changed the industry. Europe’s challenge is not merely to produce better. It is to compete against a global structure in which scale, subsidies, energy, financing and industrial policy matter as much as productivity.
Carbon is the second rupture. Europe built the most ambitious climate system in the industrial world, but discovered the cost of financing the transition of heavy industry. Steel does not move to low carbon like a software update. It needs competitive electricity, green hydrogen at scale, carbon capture, demand for green steel and time to replace assets worth billions.
Earlier this week, ArcelorMittal, thyssenkrupp Steel and voestalpine — which represent 60% of European production — called for pragmatic reform of the region’s carbon market, the ETS. Their argument is simple: Europe is raising the cost of producing steel before creating the conditions that would make green steel economically viable.
The companies do not deny the climate transition. They warn that the bill has arrived before the instruments capable of paying it without destroying the current industrial legacy. That is the heart of Europe’s problem. The European Union wants more manufacturing, greater strategic autonomy, less dependence on China and more low-carbon products. At the same time, its climate architecture imposes rising costs on the sectors that sustain the physical economy: steel, cement, aluminum, chemicals, energy, transport and machinery.
The CBAM, Europe’s carbon border adjustment mechanism, tries to correct part of that asymmetry. In practice, however, it helps protect the domestic market but does not fully solve exports or competition in more advanced industrial goods.
The irony is that Europe has rediscovered industrial policy just as its climate policy has begun to threaten industry. There is no strategic autonomy without competitive energy. There is no green steel without customers willing to pay for it. And there is no industrial transition if the cash flow of the old industry is consumed before the new one is ready.
That is the dilemma ArcelorMittal embodies at 20. The 2006 merger worked because it created a stronger company to withstand crises. But the next test is different. It is not only about surviving the cycle. It is about surviving a regime change. In other words, globalization is giving way to industrial protection.
Steel has not lost its strategic value. Quite the opposite: almost everything the new economy promises requires steel — data centers, wind, solar, nuclear, hydrogen, railways, ports, electric vehicles and defense.
Europe is showing that the energy transition has become an industrial contest. China, with its scale and costs, has become the argument for Europe to put part of the transition on ice or demand new conditions before moving ahead. When carbon prices threaten to shift factories out of Europe, the rhetoric changes: climate urgency begins to share space with economic security, jobs and competitiveness.
That is the lesson Brazil should absorb. The country cannot enter the green economy merely as a supplier of iron ore, clean energy, carbon credits or cheap biomass. If it does, it will exchange one dependency for another: it will stop selling only traditional commodities and start selling green inputs defined by rules, prices and certifications created elsewhere.
Brazil’s opportunity lies elsewhere. It is to use its environmental advantage to build and strengthen the new industry, not merely to comply with external demands. Competitive energy, carbon certification, traceability, financing, intelligent trade defense and domestic demand for low-carbon products only make sense if they serve a productive strategy.