Evaluating the technology path of Japanese steelmakers in green steel competition

Abstract

This study examines the technological pathway adopted by Japanese steelmakers competing for environmentally friendly or green steel production. The pathway is identified by analyzing documents from the International Energy Agency (IEA), the Japanese government, public institutes, business federations, and steelmakers. The findings suggest that Japanese integrated steelmakers using blast furnace and basic oxygen furnace (BF-BOF) technologies have lagged in technological development and capital investment for green steel. Motivated to maintain the value of fixed capital and reputation as high-grade steel producers, they have persistently adhered to high CO₂-emitting BF-BOF technology. Consequently, these firms have slowly transitioned to the lower CO₂-emitting electric arc furnace (EAF) method and have been sluggish in developing the direct hydrogen reduction process that promises zero-emission production. However, the Paris Agreement and the Japanese government’s carbon neutrality declaration have pressured these companies to reassess this stance. This case illustrates that theories on the political economy of the environment and the conservative approach of large corporations toward new technologies continue to hold relevance in the era of emerging green technologies.

Keywords:

• Political economy of the environment
• Global warming
• Carbon neutrality
• Technology path
• Steel industry

Acknowledgements

I thank the anonymous reviewers for their thorough and pertinent comments. I also thank Editage (www.editage.jp) for English language editing. Remaining faults are attributable to the author.

Disclosure statement

No potential conflict of interest was reported by the author.

Data availability statement

Data sharing is not applicable to this article as no new data were created or analyzed in this study.

Notes

1 This study addresses the reduction of CO₂ emissions within the steel production process, a concept referred to as “decarbonization” throughout the text. Steel produced with CO₂ emissions curtailed to levels compatible with global warming mitigation is termed “green steel.” The phrase “zero emissions” is used more strictly, denoting a production process that does not emit CO₂.

2 Keidanren’s action plans align with government policies. For instance, the Japanese government’s “Plan for Global Warming Countermeasures,” formulated in 2021, incorporates the promotion of Keidanren’s action plan. However, for Keidanren, industry associations, and their member companies, these targets are voluntary, with no legal mandate for achievement.

3 The English article of Shoji and Miyamoto (1977) is a translation of Chapter 2 of the original Japanese book by Shoji and Miyamoto (1975). The two behavioral principles discussed in this study are outlined in Chapter 1 of the original text.

4 The author calculated the figures using published data from the National Institute for Environmental Studies, Japan.

5 The CO₂ emissions from producing one ton of crude steel are referred to as emission intensity. The IEA’s intensity calculation method includes several processes within this boundary. These processes encompass iron and steelmaking, iron ore agglomeration, production of reducing agents like coke and hydrogen, production of lime fluxes, combustion of off-gases from coke ovens and blast furnaces, and the generation of imported electricity, heat, hydrogen, and supplied fossil fuels. CO₂ emissions from these processes are accounted for in the calculations (IEA 2022, 104–108).

6 The author’s calculations in this paragraph are based on data from worldsteel (2020).

7 Unless otherwise stated, the figures in this subsection are sourced from the JISF (annual).

8 The author calculated the figures based on JISF (2020).

9 The author calculated the figures based on Cullen et al. (2012) and Yang et al. (2023).

10 References for the “Voluntary Action Plan on the Environment” are official Keidanren documents listed below, except where otherwise noted. The JISF reports are also available from this site (https://www.keidanren.or.jp/policy/vape.html#vape).

11 Under the Kyoto Protocol, developing countries were not obligated to reduce GHG emissions. The United States withdrew from the Kyoto Protocol in 2001.

12 APP is an initiative set up in 2005 by Australia, Canada, China, India, Japan, the Republic of Korea, and the United States. Canada became a member in 2007. APP established eight task forces to develop cleaner technologies and practices to mitigate climate change. The partnership was formally terminated in 2011.

13 For example, refer to “Energy Efficiency in the Japanese Steel Industry,” JISF, Feb. 25, 2008 (https://www.jisf.or.jp/en/activity/warm/efficiency/index.html), and “IEA Report States that Japan Has the World’s Most Energy Efficient Steel Industry,” JISF, Oct. 29, 2008 (https://www.jisf.or.jp/en/activity/warm/iea/index.html). IEA (2008) and RITE System Research Group (2008) are cited in these releases.

14 For this section, refer to the document posted on the NEDO website, “Development of Environmentally Sound Process Technology” (https://www.nedo.go.jp/activities/ZZJP_100050.html).

15 CCS is a technology for capturing and storing CO₂, and CCUS includes the utilization of the captured CO₂.

16 For the “Commitment to a Low Carbon Society,” refer to the official Keidanren documents listed below, except where otherwise noted. The JISF reports are also available from this site (https://www.keidanren.or.jp/policy/vape.html#lcs).

17 For the “Carbon Neutral Action Plan,” refer to the official Keidanren documents listed below, except where otherwise noted. The JISF reports are also available from this site (https://www.keidanren.or.jp/policy/vape.html#cnap).

18 For the Green Innovation Fund Project “Utilization of Hydrogen in Steelmaking Processes,” refer to documents submitted by METI, NEDO, and participating companies listed below (https://green-innovation.nedo.go.jp/project/utilization-hydrogen-steelmaking/).

19 For the facts set out in this paragraph, see “Start of Studies to Shift from Blast Furnace Steelmaking Process to Electric Arc Furnace Steelmaking Process,” Nippon Steel, News Release, May 10, 2023 (https://www.nipponsteel.com/common/secure/en/news/20230510_400.pdf); “JFE Steel Corporation Carbon Neutrality Strategy Briefing,” Sep. 1, 2022 (https://www.jfe-holdings.co.jp/en/investor/climate/presentation/index.html); “Kobe Steel to accelerate feasibility study of Low-CO₂ Iron Metallics Project in Oman, Kobe Steel Ltd.,” Apr. 10, 2023 (https://www.kobelco.co.jp/english/releases/1211747_15581.html).

20 The figures in this paragraph are from the Global Steel Transformation Tracker, Agora Energiewende website (https://www.agora-energiewende.de/en/service/global-steel-transformation-tracker/) (Accessed 11 May, 2023).

21 “Nippon Steel Corporation Announces Medium- to Long-term Management Plan,” Nippon Steel Corporation, May 5, 2021 (https://www.nipponsteel.com/en/ir/library/pdf/20210305_100.pdf); “JFE Steel to Optimize Domestic Production Operations through Structural Reforms,” JFE Steel Corporation News Release, March 7, 2020 (https://www.jfe-holdings.co.jp/en/investor/zaimu/g-data/2019/March2020-200327-release03.pdf); and “FY 2022 Earnings Summary,” Nippon Steel Corporation, May 10, 2023 (https://www.nipponsteel.com/en/ir/library/pdf/20230510_600.pdf).

*Internet resources were accessed on 20 August, 2023, unless otherwise noted.

Additional information

Funding

This work was supported by the JSPS KAKENHI under Grant Number JP 20K01905.