Nippon Steel to invest ¥38.4bn

Nippon Steel is set to invest ¥ 38.4bn (USD 250M) into the development of highly efficient hydrogen-based direct iron reduction and electric arc furnaces to drastically cut emissions from steel production.

In traditional blast furnace-based steelmaking, coking coal is fired to “reduce” iron ore, or remove its oxygen content, while simultaneously producing high heat to melt the metal.

However, this is an emissions-intensive process, with Japanese government figures putting its domestic steel industry’s CO2 footprint at 131 million tonnes a year, or 40% of the country’s industrial emissions.

The move by Nippon Steel may be a reaction to plans by the EU — a major steel importer — to start taxing imports according to their lifecycle greenhouse gas emissions from 2026 as part of the bloc’s Carbon Border Adjustment Mechanism, which is expected to drive steelmakers outside its borders towards greener alternatives to blast furnaces.

Nippon Steel’s research and development programme, which is scheduled to run from this year through 2028, aims to develop extremely efficient technology that uses H2 to directly reduce low-grade iron ore and produce 100 or more tonnes of iron per hour, which can then be melted into steel in electric furnaces.

The focus on low-grade iron ore could also widen the potential supply for green steelmaking. For example, H2 Green Steel’s planned facility in Sweden has to use high-grade, pelletised iron ore, which it is set to ship from Brazil and Canada as it has been unable to sign domestic supply agreements.

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