Nippon Steel to Invest $6 Billion in Electric Arc Furnaces at Three Japanese Plants

Nippon Steel

Government-Backed Decarbonization Drive Targets 2.9M Ton Annual EAF Capacity

New EAF to Be Built at Kyushu Works as Part of Carbon Neutral Vision 2050

Nippon Steel has announced a major JPY870 billion ($6.05 billion) investment to install electric arc furnaces (EAFs) at three of its steel plants in Japan, significantly advancing its decarbonization goals under the Green Transformation Promotion Act.

A new EAF will be built at the Kyushu Works facility, while two other plants will see expansion and recommissioning of existing EAF capacity. The combined annual production capacity across the projects will be 2.9 million tons, the company confirmed.

Government to Provide JPY251 Billion in Subsidies

The Japanese government will contribute JPY251 billion in subsidies to the initiative by fiscal year 2028/2029, recognizing Nippon Steel’s participation in national emissions reduction programs. This large-scale conversion to EAF technology is a key element in Nippon Steel’s Carbon Neutral Vision 2050.

In 2024, the company reported a 43% reduction in carbon emissions during testing at a pilot furnace in its East Nippon Works (Kimitsu Area). Nippon Steel is simultaneously developing three proprietary green steelmaking technologies.

Meanwhile, the firm’s international ambitions continue, with US President Donald Trump recently confirming a planned partnership between US Steel and Nippon Steel, though further details remain pending.

ScrapInsight Commentary

Nippon Steel’s pivot to EAFs marks a pivotal step in Asia’s decarbonization journey—but it also signals a rising long-term demand for high-quality scrap. As one of the world’s top integrated steelmakers accelerates its shift away from blast furnace technology, the implications for global scrap flows, pricing, and quality requirements will be far-reaching. Expect increased pressure on supply chains to meet rising EAF-grade scrap demand in Japan and beyond.