CAJ welcomes JEF Steel’s investment in an innovative electric arc furnace  

JFE Steel announced on 10 April 2025 that it will invest a total of ¥329.4 billion to deploy an innovative electric arc furnace (a high-efficiency, large-scale electric furnace) at its West Japan Works steel plant in Kurashiki, Okayama. This investment is supported by up to ¥104.5 billion in government funding under the GX Promotion Act. The project will support the low-carbon production of advanced steel materials, such as high-tensile steel and electromagnetic steel. 

This marks a significant turning point for JFE Steel, Japan’s second-largest steelmaker, and reflects growing private and government support for scalable low-carbon technologies, such as electric arc furnaces and hydrogen-based direct reduced iron (DRI). We recognize this investment as a positive signal to the market and welcome it as a meaningful step toward industrial decarbonization. 

Investors will also seek greater clarity on how this move fits within JFE’s broader decarbonization strategy, including how future capital expenditures will be directed toward EAFs and other credible low-carbon solutions. 

We hope that clear and comprehensive disclosure of decarbonization pathways, capital allocation, and lobbying activities will enhance investors’  understanding and confidence, further contributing to building long-term relationship of trust between the company and the investors.  

Comment from Yasunori Takeuchi, Representative Director of Corporate Action Japan: 

“We welcome JFE Steel’s decision to invest in an innovative electric arc furnace with the support of the Green Innovation Fund, which enables the production of high-quality, low-carbon steel using its own technology and low-carbon reduced iron. It is a steady and concrete step toward the carbon neutrality of the steelmaking process. We hope this will lead to increased demand for low-carbon steel products and the decarbonization of electric power, thereby promoting the decarbonization of the entire supply chain.”