Japanese Steelmakers Accelerate Decarbonization Efforts
Major Japanese steel manufacturers are ramping up their technological advancements and financial investments in order to decarbonize their operations and support Japan's objective of achieving carbon neutrality by 2050. Statistics from the National Institute for Environmental Studies reveal that approximately 50% of the country's total carbon dioxide emissions from the industrial sector come from the steel industry. Consequently, decarbonization efforts by steelmakers are crucial to Japan's sustainability goals, reports The Japan Times
The leading steelmakers in Japan predominantly employ blast furnaces that rely on the combustion of iron ore and coking coal to produce steel. However, they are now actively pursuing strategies to increase the adoption of electric furnaces, which emit significantly less CO2 compared to blast furnaces. Additionally, they are exploring the possibility of substituting hydrogen for coking coal in the steel production process.
Nippon Steel, the industry leader, is making significant efforts to adopt large-scale electric furnaces. They recently commenced commercial operations of a new electric furnace at their Setouchi Works Hirohata Area, focusing on the production of electrical steel sheets for automobiles. With an annual capacity of 700,000 metric tons, this furnace is the world's first capable of integrated production of high-quality electrical steel sheets.
Nippon Steel is simultaneously exploring technological innovations for blast furnaces. They are preparing to conduct a groundbreaking demonstration test at the No. 2 blast furnace in the East Nippon Works Kimitsu Area, involving the use of hydrogen gas for combustion instead of coking coal. Furthermore, they are developing a novel method for iron ore reduction that exclusively employs hydrogen, eliminating the need for coking coal. The company's president, Eiji Hashimoto, aims to position Nippon Steel as the first to decarbonize steel production and help Japanese manufacturers regain global leadership.
JFE Steel, a subsidiary of JFE Holdings, plans to decommission a blast furnace at its West Japan Works Kurashiki and replace it with a large-scale electric furnace as early as 2027. Electric furnaces, which melt and recycle scrap steel, generate only around one-quarter of the CO2 emissions produced by blast furnaces per unit of production. By implementing this change, JFE Steel estimates a reduction of approximately 3 million metric tons of CO2 emissions annually.
However, transitioning to electric furnaces necessitates a substantial quantity of high-quality steel scrap as raw material. JFE Steel President Yoshihisa Kitano indicates that the investment required for this shift, including scrap collection bases, is expected to amount to several tens of billions of yen.
Kobe Steel, ahead of its competitors in the industry, has received an order for an iron ore reduction facility that uses only hydrogen as a reducing agent. Scheduled to start operating in 2025, this facility with an annual capacity of 2.1 million metric tons is expected to significantly reduce CO2 emissions compared to conventional iron and steel manufacturing processes. It will utilize hydrogen derived from renewable energy sources.
The Japanese steel industry estimates that implementing innovative decarbonization technologies will require an investment of approximately ¥10 trillion or $71 billion