Germany’s Federal Ministry for Economic Affairs and Climate Action says it would support the technological transition of ArcelorMittal’s German mills with subsidies to the tune of €1.3 billion ($1.4 billion).

The pledge was given by economy minister Robert Habeck on Monday during a visit to the group’s Bremen works. It is still subject to approval by the European Commission.

ArcelorMittal intends to convert its two oxygen-route mills in Bremen and Eisenhüttenstadt to DRI/EAF-based production, which would cost €2.5 billion combined for both sites, Kallanish learns.

“This announcement from Berlin encourages us to proceed with the preparations for the transition of the two sites,” says ArcelorMittal Bremen and Eisenhüttenstadt chief executive Thomas Bünger. “In the course of the next 12 months, we will be enforcing the engineering works of the project.”

The financial pledge, although preliminary, gives ArcelorMittal the assurance that it can expect the same state support as the other German oxygen-route steelmakers. Salzgitter, thyssenkrupp Steel and Saarland mills Dillinger and Saarstahl have already received the green light for subsidies for their respective transition projects.