Posted on 27 Mar 2025
The steel sector is “hard-to-abate”, accounting for about 7% of global carbon emissions, which highlights the importance of low-carbon steel. Currently, companies in Japan, South Korea, and China are actively working on research and development in this area.
Among them, Nippon Steel’s experimental results have even set a world record. Experts suggest that although the green steel manufacturing methods across Asia vary, it’s hard to judge which technology is taking the lead, but the key point is that none of these methods have reached commercialization yet.
Steel is a primary material used in vehicle manufacturing, and European automakers, under government pressure, are seeing a growing demand for green steel. Japan plans to start offering subsidies for vehicles using low-carbon steel in April while also planning to amend laws to encourage the use of green steel in products. Other sectors, such as construction and railroads, which are major steel consumers, also have decarbonization needs.
Nippon Steel has been involved in the national green hydrogen project since 2008, with the goal of replacing part of the local coal use. After over a decade of research and development, in December of last year, one of its factories in Chiba Prefecture successfully used enough green hydrogen in steelmaking, significantly reducing carbon emissions. Nippon Steel claims that this new technology reduces carbon emissions by 43% compared to traditional steelmaking methods, setting a world record.
However, it will take some time before the technology is fully commercialized. Nippon Steel admits that the new technology faces scalability challenges because commercial furnaces are 400 times larger than laboratory ones, and scaling up may reduce cost-effectiveness. Moreover, the local supply of green hydrogen produced by renewable energy is insufficient, and Nippon Steel may need to import hydrogen from abroad, though this will increase costs.
According to Chinese Nikkei, the Japanese government aims to reduce hydrogen costs to 30 yen per square meter (about 0.2 USD) by 2030 and decrease it to 20 yen (about 0.13 USD) by 2050. However, for large steelmakers, the cost should be reduced to 8 yen (about 0.053 USD) to remain competitive with current manufacturing costs.
In addition, Nippon Steel is also working on improving different technologies, such as applying Direct Reduced Iron (DRI) in low-carbon electric furnace steelmaking, using abundant low-grade iron ore as a raw material to expand the electric furnace’s applicability, or using hydrogen as a reducing agent instead of natural gas.
China and South Korea are also making significant progress in low-carbon steel technology. China’s Baowu Steel Group, the world’s largest steel manufacturer, has successfully reduced carbon emissions by more than 20% using the blast furnace method and is actively commercializing this technology. South Korea’s largest steelmaker, POSCO, plans to launch hydrogen-based direct reduced iron steelmaking technology in 2028.
In a report from the non-profit think tank "Transition Asia" in October of last year, it was pointed out that China has significantly advanced in DRI technology. The local companies have announced seven landmark projects, which suggest that China has the potential to achieve world-leading levels by 2030 to produce 15 to 20 million tons of low-carbon steel annually.
Kenta Kubokawa, an analyst at Transition Asia, believes that it’s still unclear which country’s low-carbon technology is ahead because each has its strengths and weaknesses. However, if we focus only on the direct reduced iron technology used in electric furnaces, Japan’s commercialization goals seem to be lagging behind Europe, China, and South Korea, with a gap of 5 to 10 years.
Source:Reccessary
