Welcoming Nippon Steel’s Strategic Shift toward the Electric Arc Furnace Process 

On May 30, Nippon Steel Corporation announced its decision to implement a large-scale capital investment to transition from the blast furnace process to the electric arc furnace (EAF) process, following the adoption of the project under the Green Transformation (GX) Promotion Act’s governmental support program. We welcome this strategic investment initiative, as it accelerates fundamental decarbonization and accurately responds to anticipated changes in future market needs, thereby enhancing the company’s corporate value. 

The announced project entails a substantial investment of approximately 868.7 billion yen across three steelworks—Yawata Area of Kyushu Works, Hirohata Area of Setouchi Works, and the Yamaguchi Works (Shunan Area)—including the construction, expansion, and modification of EAF-related facilities. The project is expected to convert approximately 2.9 million tons of annual production capacity to EAFs and reduce CO₂ emissions by around 3.7 million tons annually. The project has been selected under the GX Promotion Act and will receive up to 251.4 billion yen in government support, easing the initial capital burden and mitigating investment risks.  

While Corporate Action Japan highly values such investment aimed at concrete emission reductions, ensuring the economic viability of this GX investment will require the establishment of a sound green steel market where the “value of CO₂ reduction” is properly recognized and appropriately compensated. We expect the company to actively contribute to building such a market. 

Corporate Action Japan will continue to collaborate with investors to engage in constructive dialogue with Nippon Steel. Through this engagement, we aim to support the company’s transition efforts and contribute to the broader realization of a more sustainable society.