Company: MT
Filing Date: 2025-03-10
Form Type: 20-F
Source: 0001243429-25-000017
Chunk: 28

Company: ArcelorMittal
Filing Date: 2025-03-10
Form: 20-F
Chunk 28
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 in the later years of the second trading period of Phase IV (given the

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amount of CO 2 emission allowances is currently insufficient to satisfy technically achievable operating conditions) and lead to significant increases in prices for emissions allowances. The Company’s operations will be subject to the additional costs from these purchases, many of which may be significant and higher than currently expected and may or may not be effectively hedged in the future. In addition, the effectiveness of the CBAM remains untested and the provisions to address circumvention risks, including resource shuffling and cost absorption, may be insufficient, and no solution for exports has yet to be considered. Similar regulations have been implemented to date in several jurisdictions, and additional measures may well be enacted in the future in other jurisdictions. Whether in the form of a national or international cap-and-trade emissions permit system, a carbon tax or acquisition of emission rights at market prices, emissions controls, reporting requirements, or other regulatory initiatives, such environmental regulations could have a negative effect on ArcelorMittal’s production levels, income and cash flows. These regulations could also negatively affect the Company’s suppliers and customers, which could translate into higher costs and lower sales. Furthermore, many developing nations have not yet instituted significant GHG regulations, and the Paris Agreement specifically recognizes that GHG emissions will peak later in developing countries. As the Intended Nationally Determined Contributions (“INDC”) for developing nations under the Paris Agreement may be less stringent than for developed nations in light of different national circumstances, ArcelorMittal may be at a competitive disadvantage relative to steelmakers having more or all of their production in developing countries. Depending on the extent of the difference between the requirements in developed regions (such as Europe) and developing regions (such as China or the CIS), this competitive disadvantage could be severe and has resulted, and in the future may result, in production cuts due to relatively higher carbon costs rendering production structurally unprofitable. See "Properties and capital expenditures—Property, plant and equipment” for further information regarding production levels by segment. In addition, as regulators and investors increasingly focus on climate change issues, the Company is exposed to the risk of frameworks and regulations being adopted that are ill-adapted to steel industry dynamics . For example, the most established framework for carbon pricing and emissions trading schemes is currently the EU-ETS discussed above. As indicated above, while a CBAM has been adopted to limit competitive distortions from the ETS, it does not appear sufficient to enable the steel industry in Europe