$6.05B decarbonisation investment targets transition to electric arc furnace (EAF) technology at three Japanese plants.
2.9M metric tons of new annual steel production capacity expected by 2029.
$1.75B in government subsidies will support the shift under Japan’s Green Transformation initiative.
Nippon Steel is investing ¥870 billion (USD $6.05 billion) to modernize three domestic plants with electric arc furnace (EAF) technology, aiming to significantly reduce carbon emissions in one of the world’s most carbon-intensive industries.
The move marks a pivotal shift away from traditional blast furnace (BF) steelmaking, which relies heavily on coal. Instead, EAFs use electricity to melt scrap metal or direct reduced iron—an approach that slashes emissions but carries high capital and energy costs.
“This investment is a key step toward our Carbon Neutral Vision,” Nippon Steel said in a statement, referencing its 2021 pledge to cut CO₂ emissions by 30% by 2030 and reach net-zero by 2050.
The initiative includes the construction of a new EAF at the Kyushu Works plant and upgrades at two additional facilities. The three revamped plants are projected to collectively produce 2.9 million tonnes of steel annually, starting in fiscal 2029.
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The Japanese government has pledged up to ¥251 billion (USD $1.75 billion) in subsidies under the Green Transformation (GX) Promotion Act to help absorb the economic challenges of the decarbonisation push.
“Steelmaking accounts for 7%–9% of global fossil fuel-related emissions,” Nippon Steel noted, underlining the urgency and scale of its transition plan.
The company has already made early progress: in late 2024, it reported a 43% reduction in carbon emissions from a test furnace at its East Nippon Works site.
“This is part of our twofold strategy—to decarbonize our operations and help customers reduce their emissions through innovative steel solutions,” the company said.
The capital-intensive transition positions Nippon Steel as a frontrunner in Asia’s green industrial transformation and signals strong alignment with global ESG investment priorities.
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