ArcelorMittal (MT) halted investments in low carbon steelmaking at its German site in Bremen and Eisenhuttenstadt, citing a "lack of certainty" around market conditions and policy support.

A contract with the German government for 1.3 billion euros ($1.5 billion) in funding had required construction on the direct reduced iron and electric arc furnace project to start this month, ArcelorMittal said Thursday in a statement.

"Given the realities of the market and the economics of low-carbon emissions steelmaking," the company notified the government formally "that it cannot proceed with these investments."

The company said in November that it was unable to make final investment decisions on construction, "given that the policy, energy and market environments had not moved in a favorable direction."

"The next step in Bremen and Eisenhuttenstadt will focus on detailed planning for the construction of electric arc furnaces, to be ready for a scenario in which there is a strong business case," the company said.

"The European steel market is under unprecedented pressure, with weak demand and high levels of imports," ArcelorMittal said.

The company's shares fell 2.3% in recent trading Friday.

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