ArcelorMittal steel mill investigated for EU Emissions Trading System scam in Italy

July 4, 2024 - July 4, 2024 - Yet another former ArcelorMittal steel operation is mired in controversy this week, with the Taranto mill in Italy entered by financial police investigating allegations of false materials certifications and submission of false data to the EU ETS register during 2022 and 2023 [1]. ArcelorMittal owned 62 percent of the venture during those years.

“It seems every month there is a new scandal involving ArcelorMittal grossly failing its human rights responsibilities, backtracking on its climate plans, lining its shareholder’s pockets while failing to pay for basic pollution-prevention technologies… and now it is alleged to have been cooking the books in Italy,” said Pascal Husting, Shiny Claims, Dirty Flames campaign lead.

“As ArcelorMittal sportwashes its image at the Olympic games, the scandals dogging it demonstrate that it has a long way to go to be the champion it pretends to be. All of its shiny claims are marred by the dirty flames of its coal-based steel production.”

ArcelorMittal’s venture in Italy has had a history of troubles. In February, 2024, after the company refused to make any more investments in cleaning up the Taranto plant, it was put under extraordinary administration and passed under control of government appointed commissioners [2]. ArcelorMittal remains the company’s largest shareholder.

The Taranto steel mill is a major emitter of greenhouse gases in Italy. ArcelorMittal notoriously did not include emissions from these assets in its climate reporting on the grounds it was a joint venture that it did not control. This does not wash in climate reports and will not wash if false reporting is proven either.

ENDS

Contacts:

Pascal Husting - Spokesperson (EN/FR)

Shiny Claims, Dirty Flames campaign

+352 621 887 730

Caroline Ashley - Spokesperson (EN)

Director, SteelWatch

caroline@steelwatch.org, +44 7947 691 911

Greg McNevin (EN)

Communications, SteelWatch (Australia)

greg@steelwatch.org, +61 475 247 044

Notes:

1. The alleged fraud is related to the European Union Emissions Trading System. The allegations involve the certification of false quantities of consumption of raw materials, finished and semi-finished products and related inventories and declarations of a lower number of CO2 allowances than the one actually issued to the EU ETS register (European Emissions Trading System). This way, the company would have benefited from unjust enrichment. The period of the alleged fraud are the years 2022 and 2023, when Acciaierie d’Italia was under 62% ownership by ArcelorMittal in a joint venture with the Italian State through its corporate vehicle Invitalia. Ex Ilva, truffa allo Stato sulle quote di CO2: 10 indagati della vecchia gestione https://www.ilsole24ore.com/art/ex-ilva-truffa-stato-quote-co2-10-indagati-vecchia-gestione-AFs4RJSC
2. Italy takes over troubled steel mill (19/02/24) https://www.france24.com/en/live-news/20240219-italy-takes-over-troubled-steel-mill
3. SteelWatch Arcelormittal Corporate Climate Assessment 2024: https://steelwatch.org/reports/arcelormittal-corporate-climate-assessment-2024/ArcelorMittal ESG and Climate rating: https://www.msci.com/our-solutions/esg-investing/esg-ratings-climate-search-tool/issuer/arcelormittal-sa/IID000000002157753 The company’s latest Integrated Annual Review, published in April 2024, stated: “We appreciate the work that SBTi has done to model a 1.5C trajectory for steel. After much discussion and consideration, we have concluded that in the absence of an appropriate global policy, we are not in a position to credibly set a science-based aligned group target at this point in time.” (emphasis added). https://corporate.arcelormittal.com/media/press-releases/arcelormittal-publishes-its-2023-integrated-annual-review ArcelorMittal is responsible for the same amount of emissions as Belgium. It planned to spend USD1.5 billion on decarbonisation over the last three years, but has spent just USD500 million. In the same three-year period, it handed USD11 billion to shareholders through stock buybacks and dividends, and was awarded billions in subsidies from European governments to decarbonise its operations. The company has previously said that the total cost for its planned clean steel transition actions to 2030 would be USD10 billion.The Fair Steel coalition has also documented instances of land grabs, ecosystem destruction, loss of livelihoods, and serious health problems have been documented, as well as ArcelorMittal’s silence on enforced disappearances around its mines and steel plants in Mexico, Brazil, Liberia, and South Africa, in the new report: The Real Cost of Steel https://edlc.org/wp-content/uploads/2024/04/The-Real-Cost-of-Steel.pdfAdditionally: Leaked Report Highlights Pollution Problems at ArcelorMittal’s Bosnian Steelworks https://www.occrp.org/en/37-ccblog/ccblog/18799-leaked-report-highlights-pollution-problems-at-arcelormittals-bosnian-steelworks
4. Shiny Claims, Dirty Flames (http://shiny.claims) is a campaign organised by an alliance of different organisations, facilitated by the Fair Steel Coalition, and hosted by SteelWatch, calling on ArcelorMittal to:
   1. Respect human rights, in actions not just words;
   2. Stop making empty promises and be a real climate champion;
   3. Invest in future proofing your company, not enriching shareholders;
   4. Put workers, communities, and our environment first;
   5. Stop its dirty tricks: be accountable and transparent.