Japan’s Top Steelmaker Set to Go Green with $700 Million “Green Steel” Project

Japan’s largest steelmaker is considering a major investment in a hydrogen green steel project as a global push to decarbonize one of the world’s most polluting industries gathers steam.

Nippon Steel is exploring a project outside its home market that could cost about 100 billion yen ($733 million) or more, said Takahiro Mori, vice president overseeing global operations. He said Australia and Brazil are potential destinations, where high-quality iron ore is available with cheaper electricity than Japan.

Steel is one of the building blocks of the global economy, needed for infrastructure, cars, and appliances, and while demand is expected to continue to grow, manufacturers are exploring ways to reduce their carbon footprint. The industry is one of the biggest polluters because it currently relies on coal-fired blast furnaces, especially in Asia, which account for more than 70 percent of global production.

“We cannot avoid the path to carbon neutrality,” Mori said. “We are currently comparing several projects to see if there is anything that meets the criteria for green steel production or investment.”

Nippon Steel and others, including ArcelorMittal, the world’s largest steel producer outside China, and China Baowu Steel Group, have all pledged to become carbon neutral by the middle of this century. Elsewhere, South Korean rival Posco recently announced plans to invest $40 billion in hydrogen production by 2040 with Australian partners, as well as green steel production.

There is no real difference between traditional steel and its green counterpart, and the difference lies in the way it is made, although there are no defining standards or criteria. Traditionally, steel is made by heating iron ore with coking coal in a blast furnace. One way to reduce the process and reduce emissions is to replace fossil fuels with hydrogen.


To meet its carbon target, Nippon Steel plans to increase the use of hydrogen in existing blast furnaces and build 100% hydrogen-based so-called direct reduction plants. In addition, it produces more recycled metal by remelting scrap metal in electric arc furnaces. The company plans to reduce emissions by 30% by the end of the decade, or 2050, as a way station for carbon neutrality.


Japan’s high electricity costs hamper domestic production, forcing the company to look for opportunities outside the country. to die “It would be best if we could work on a direct reduction process using hydrogen in Japan, but it’s not easy,” he said.

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