Japanese largest steel producer Nippon Steel has applied for a government subsidy to build new electric-arc furnace (EAF) plants, aiming to accelerate its decarbonisation efforts.
Nippon Steel has applied for a government subsidy that provides financial support for hard-to-abate sectors to shift their manufacturing processes to one that emits less greenhouse gases (GHG), according to the company on 11 October.
Shifting crude steel production process from its conventional basic oxygen furnace (BOF) to EAF can reduce a significant volume of GHG, but it comes along with a huge amount of capital expenditure, Nippon Steel said.
The subsidy amount requested by Nippon Steel is unknown, but the government will allocate a maximum of around ¥500bn ($3.3bn) for the entire funding scheme, according to the ministry of trade and industry (Meti). The subsidy application will close on 28 October.
Nippon Steel plans to utilise the public fund to build a new EAF facility at its Yahata plant in the southern Kyushu area. This is to replace the existing BOF facility that is producing 3.6mn t/yr of steel products.
The Japanese steel producer also aims to secure the subsidy to build another EAF plant at its Hirohata plant in west Japan area, where Nippon Steel started its first EAF commercial operations in 2022. Crude steel output at the Hirohata is a combined 460,000 t/yr from EAF and BOF facilities, according to the firm, but the breakdown was not disclosed.
The Japanese government is likely to approve the Nippon Steel's request to keep the country's decarbonisation strategy on track. Japan aims to hit its net zero emission goal by 2050 and it is critical to reduce GHG emissions from the steel industry, which accounts for 35pc of total emissions in the country's manufacturing industry.
Other Japanese BOF firms are also accelerating their shift to the crude steel production with scrap metal, with JFE Steel and Kobelco planning to start commercial EAF operations in 2027 and during the 2030s, respectively.
