Japan’s largest steelmaker to invest billions of yen into hydrogen-based direct iron reduction
Nearly 60% of the bill will be footed by the Japanese government
Nippon Steel, the largest steelmaker in Japan, is set to invest ¥38.4bn ($250m) into the development of highly efficient hydrogen-based direct iron reduction and electric arc furnaces to drastically cut emissions from steel production.
Stay ahead on hydrogen with our free newsletter
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.
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 also aims to reduce impurities in hydrogen-processed iron, such as keeping phosphorus concentrations to 0.015% or less, in order to make high-grade steel, while also producing slag from the electric arc furnaces at a quality suitable for use in cement—eg, 3% or lower iron oxide concentration.
A demonstration is scheduled to be held at a test electric arc furnace a fifth the scale of a conventional blast furnace in 2030.
The Japanese government’s New Energy and Industrial Technology Development Organization (NEDO) will contribute ¥23bn, footing around 60% of Nippon Steel’s bill.
But while similar government-backed projects in Europe to use hydrogen for direct iron reduction have committed to use green hydrogen — produced from renewables-powered electrolysis — in order to reduce emissions by up to 95%, Nippon Steel’s pilot makes no such commitment.
NEDO suggests that the technology developed will reduce CO2 emissions by “more than 50%” by 2030.