Japan’s steelmaker Nippon Steel announced last Friday (May 30) an 868.7-billion-yen investment to establish three new electric arc furnaces in Japan.

This move is to significantly reduce carbon emissions by shifting from conventional blast furnaces, which use coal, to electric arc furnaces that melt steel scrap to produce new steel products. The Japanese government is expected to provide support of up to 251.4 billion yen.

The investment will raise production capacity by approximately 2.9 million tons annually, with operations commencing by fiscal year 2029. However, the transition needs substantial capital investment, leading to higher raw material and electricity costs.