In this way, the company aims to support its decarbonization efforts
Japan’s largest steel producer Nippon Steel has applied for a government subsidy to build new electric arc furnaces (EAF), Argus.Media reports.
The state subsidy applied for by the company provides financial support for industries that are difficult to reduce greenhouse gas emissions, for the transformation of production processes.
It is not known exactly what amount Nippon Steel requested. However, the government will allocate a maximum of about ¥500 billion ($3.3 billion) to the entire funding scheme under the program. Acceptance of applications for subsidies will end on October 28.
As noted by the company, the transition from a traditional converter furnace to an electric arc furnace can significantly reduce carbon emissions, but requires large capital expenditures. The steelmaker plans to use government support to transition from blast furnace smelting to large-scale production at EAF at the Kyushu Works Yawata Area plant. In addition, it is about the expansion of electric steel production at the Setouchi Works Hirohata Area.
It was at Setouchi Works Hirohata Area that Nippon Steel began commercial operation of EAF in 2022.
The Japanese government is likely to approve Nippon Steel’s request to continue its decarbonization strategy. Japan aims to achieve zero emissions by 2050. The steel industry in the country accounts for 35% of the total volume of emissions in the processing industry.
As reported earlier, Nippon Steel increased unconsolidated steel shipments by 1.8% y/y in the 2023/2024 fiscal year (ended March 31) – up to 32.03 million tons. In the specified period, 44% of steel in terms of value was exported. Consolidated steel production in the 2023/2024 financial year increased by 0.5% year-on-year – to 40.51 million tons.
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