Steel Industry Transition in Japan at Risk  

Without integration of electric arc furnaces (EAF) into steelmaking fleets, and phased retirements of blast furnaces, Japanese steel companies will not meet emissions reduction targets and compete in the global green steel market, research by Transition Asia has found. The decarbonisation of the steel industry plays a critical role in the fight against climate change, as steel production currently accounts for 11% of global carbon emissions. It is estimated that the world will need to double existing steel production over the next 30 years, and do so while rapidly reducing emissions by more than 90% to meet the Paris Agreement goals. Japan’s three largest companies – Nippon Steel, JFE and Kobe Steel – are falling short of the necessary emissions reductions needed to stay on course with a 1.5°C target. Transition Asia analysis of announced corporate plans and policies shows that these steel companies surpass their corporate 1.5°C carbon budgets by substantial margins. All three steelmakers are projected to exceed their carbon budgets by 821 metric tonnes of carbon dioxide (MtCO2), 527 MtCO2 and 137 MtCO2, respectively, between 2019 and 2050.  Transition Asia has calculated the future renewable energy needs for green steel development in Japan, and estimates requirements of one Terawatt-hour (TWh) of renewable energy (RE) electricity in 2031 and 38TWh of RE electricity in 2050. 

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