The iron and steel industry is the largest source of GHG emissions in Japan’s industrial sector. Making steady progress in the sector’s decarbonization is therefore essential for achieving carbon neutrality by 2050.
The iron and steel industry has long been regarded as a “hard-to-abate” sector because conventional steelmaking methods, which rely heavily on coal, need to be fundamentally transformed. Nevertheless, demonstration projects and commercial-scale investments are advancing around the world, accelerating the shift toward new steelmaking processes.
Strong government support will be critical to this transformation. This includes funding for capital investment, technology development, and commercialization, as well as policies to build markets and demand for low-carbon steel.
The Japanese government has supported R&D to decarbonize the steel industry for many years. The GX Promotion Strategy launched in 2023 has accelerated and expanded policy support for both the supply and demand sides. This includes large-scale support for converting existing production facilities, as well as measures to stimulate demand for low-carbon steel linked to subsidies for clean-energy vehicles.
This presentation “Policies for Decarbonizing Japan’s Steel Industry: Current Status and Future Outlook” by Renewable Energy Institute provides a comprehensive review of the policies introduced to date. It also examines how each policy advances the decarbonization of the steel industry, including from a fiscal perspective.
Access the presentation here