CEO Yasunori Takeuchi spoke at a seminar organized by the Renewable Energy Institute to discuss ways to decarbonize the steel industry by 2040. Takeuchi provided insights from a shareholder’s perspective, following a new report published by German think tank Agora Industry “15 Insights on the Global Steel Transformation”.
Direct GHG emissions from the steel sector accounts for approx. 14 % of Japan’s total GHG emissions, or approx. 40% of the industrial sector. Steel products, being used in a wide range of industries including construction, automotive and shipbuilding, play a significant part of scope 3 emissions throughout the supply chain.
It is encouraging that the report shows that achieving near-zero emissions steel is technically feasible by the beginning of 2040s.
On the other hand, from an investors’ perspective, the industry needs to address the following issues so that corporate value is enhanced alongside decarbonization efforts:
(i) production costs of near-zero emission steel; (ii) quality of steel products to meet customer needs; and (iii) the timing of adopting new technologies and the risks associated with re-lining of blast furnaces.
The report also points out that comprehensive policy incentives are crucial for companies to respond to these challenges and act ambitiously.
To pursue net zero in the steel sector and its supply chain, CAJ continues to work with global institutional investors on corporate engagement with Japanese steel manufacturers. For more information on the seminar, please visit the website of Renewable Energy Institute.