In a move to reshape its steelmaking process, Nippon Steel will invest ¥868.7 billion (approx. $6.02 billion) to build three new electric arc furnaces in Japan. The company is also expecting up to ¥251.4 billion ($1.74 billion) in government support. These scrap-fed furnaces are scheduled to begin operation in fiscal year 2029 and will boost annual steel production by 2.9 million tons.
Why Is Green Steel Important?
Steel remains a cornerstone material for global development, and at the same time,e contributes to 7% of global carbon emissions. Although the steel sector emits high volumes of CO₂ due to the scale of production, steel is still among the most recyclable and energy-efficient materials over its full lifecycle.
Thus, decarbonizing steel is essential for meeting global climate goals, as steel production is one of the largest industrial sources of CO₂ pollution. And one such shift is green steel.
Green steel means making steel without fossil fuels. One way to reduce the carbon footprint is to use green hydrogen in the steel-making process.
Similarly, electric arc furnaces also help reduce emissions. They replace older furnaces but don’t always use renewable energy, so their steel isn’t always fully green.
- Green steel technologies can reduce emissions by up to 97% (H₂-DRI) and 88% (renewable-powered Scrap-EAF) compared to the traditional blast furnace-basic oxygen furnace (BF-BOF) route.
Nippon Bets Big on Electric Arc Furnaces
Unlike traditional blast furnaces that rely on coking coal, electric arc furnaces (EAFs) use recycled steel scrap, which sharply reduces CO₂ emissions. While the switch to EAFs helps Nippon Steel move closer to its decarbonization goals, the company acknowledged the higher costs of electricity and raw materials involved in the transition.
Backing from the GX Promotion Act
In March 2021, the steel giant announced its goal of achieving carbon neutrality through the adoption of three breakthrough technologies:
- high-grade steel production in large electric arc furnaces
- hydrogen-based direct reduced iron (DRI) production
- hydrogen injection into blast furnaces
As part of this commitment, Nippon Steel is moving forward with its investment to transition from the traditional blast furnace steelmaking process to the electric arc furnace method.
Currently, the company has been selected for the “2025–2029 Energy and Manufacturing Process Transformation Support Business (Business I [Steel])” under the Green Transformation (GX) Promotion Act. Following this recognition, Nippon Steel has officially decided to implement the investment.
This shift is a key part of Nippon Steel’s broader push to meet its Carbon Neutral Vision 2050, which targets a 30% CO₂ reduction by 2030 (compared to 2013 levels) and net-zero emissions by 2050.
Nippon Steel–U.S. Steel Deal Gained Trump’s Support
The Wall Street Journal reported that Nippon Steel’s $14.1 billion bid to acquire U.S. Steel recently received conditional support from former President Donald Trump. Though he had previously opposed the foreign takeover, Trump now calls it a “win” for American workers and manufacturing.
On Truth Social, Trump claimed the deal could create up to 70,000 U.S. jobs and inject $14 billion into the U.S. economy, most of it within the next 14 months.
U.S. Steel echoed this optimism, describing the deal as a transformational partnership. The company also praised Trump’s leadership, stating it would remain headquartered in Pittsburgh, a symbolic win for the city’s legacy workforce.
As part of the agreement, Nippon Steel will:
- Upgrade plants in Gary, Indiana, and near Pittsburgh
- Build a new U.S. steel mill (location undisclosed)
- Modernize U.S. Steel’s older facilities with advanced technology
To address political concerns, Nippon has agreed to establish a U.S.-led board with mostly American members, appoint American executives to lead U.S. operations, and allow federal oversight through a national security agreement. However, full details on the ownership structure are still pending.
Nippon Steel’s Carbon Reduction Milestones
Nippon Steel aims to cut total CO₂ emissions 30% by 2030 (from 2013 levels) and reach net zero by 2050. That target includes all domestic and consolidated steelmaking operations, including both blast and electric arc furnace facilities.
In fiscal 2023, Nippon Steel’s energy-derived CO₂ emissions stood at approximately 79 million tons, accounting for 96% of its total GHG output. Energy use during the same period reached 936 petajoules.
The company’s Scope 1, 2, and 3 emissions are tracked using Japan’s Green Value Chain Platform. Compare the Scope 1 and 2 emissions from the following chart
- Total Scope 3 emissions from purchased goods and services were 11,995 t-CO₂ in 2023.
Furthermore, it is advancing resource efficiency through:
- Power generation from by-product gas and waste heat
- Upgrades to coke ovens and oxygen plants
- High-efficiency regenerative burners in reheating furnaces
It regularly reviews CO₂ targets for its global subsidiaries to align with changing climate policies and standards.
Blast Furnace Slag Cuts Cement Emissions
It is also cutting emissions by using blast furnace slag in cement production. This method reduces lime and fuel consumption and lowers CO₂ emissions by about 320 kg per ton of cement—a more than 40% decrease compared to traditional cement.
Seaweed Forests and Blue Carbon Credits
Beyond steelmaking, Nippon is tapping into blue carbon through marine ecosystem restoration. In collaboration with fishery cooperatives in Hokkaido and Chiba, it created seaweed beds capable of fixing CO₂. In 2023, J-Blue Credit™ certified 33.3 t-CO₂ in emissions reductions across new pilot areas. This builds on the earlier certification of 49.5 t-CO₂ for absorption from 2018 to 2022.
Moreover, a nationwide seaweed demonstration is underway at 21 sites. Nippon is analyzing iron concentration and seaweed growth pre- and post-installation using its marine simulator “Sea Laboratory.”
Nippon Steel is boosting clean production in Japan while expanding globally. Using advanced furnaces, circular economy efforts, and global partnerships, the company commits to long-term sustainability.
As steel demand rises and regulations tighten, Nippon’s approach shows how traditional industries can pursue net-zero goals without losing scale or competitiveness.
