JFE SteelCarbon Neutrality Strategy Briefing 2023
November 8, 2023

JFE Steel Corporation

Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

3 CO 2 Reduction Through Steel Products

1 Carbon Neutrality Plan (Transition Period)•

The Steel Sector is the Largest CO2 Emitter•

Milestones of Japanese Steel Industry•

Project Supported by the Green Innovation Fund•

Multitrack Approach to Technology for Carbon Neutrality•

JFE Steel’s Transition: Direction and Challenges•

Concept of 2027 Transition in Kurashiki•

Large, High-efficiency EAF in Kurashiki:

4
5
6
7
8
9
10

Investment Overview•

Large, High-efficiency EAF in Kurashiki:

Progress on the Emirates Project•

Progress on the CO2 Emissions Reduction Plan

Necessity of Green Steel During the Transition Period

21•

Strategy to Stimulate Demand for Green Steel

22•

Contributing to CO 2 Reduction Through Green Steel JGreeX ™

23•

Adoption of JGreeX™: Achievements

24•

Business Growth Strategy Through the Supply of

25Green Steel•Contributing to CO2 Reduction by Expanding Electrical
Steel Sheet Production Capacity•

Contributing to CO2 Reduction Through Large andHeavy Steel Plates for Offshore Wind Pow er

26
27

4 CO 2 Reduction Through Efficient Use of Resources

11•

Innovation
•

•

12
13

Contributing to a Recycling-based Society by Recycling

29

Plastic Waste•

Contributing to Biodiversity Through Steel Slag Products

30

5 East Japan Works (Keihin District) Land Use Scheme
2 Carbon Neutrality Plan (Innovation Period)•

JFE Steel’s Transition: Direction and Challenges•

Necessity of Developing an Ultra-innovative Blast
Furnace Process

15•

JFE-Gr Land Use Scheme: “OHGISHIMA 2050”

32•

Carbon Neutrality Business in OHGISHIMA 2050

33

16

•

Necessity and Initiatives of CCUS

18•

Initiatives for Hydrogen Procurement

19

6 Collaborating w ith Society on Carbon Neutrality•

Collaborating with Society on Carbon Neutrality

35

Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

2

Carbon Neutrality Plan
(Transition Period)•

The Steel Sector is the Largest CO2 Emitter•

Milestones of Japanese Steel Industry•

Projects Supported by the Green Innovation Fund•

Multitrack Approach to Technology for Carbon Neutrality•

JFE Steel’s Transition: Direction and Challenges•

Concept of 2027 Transition in Kurashiki•

Large, High-efficiency EAF in Kurashiki: Investment Overview•

Large, High-efficiency EAF in Kurashiki: Innovation•

Progress on the Emirates Project•

Progress on the CO2 Emissions Reduction Plan

Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

3

The Steel Sector is the Largest CO 2 Emitter▶ The steel industry is a large CO 2 emitter, accounting for 13% of the national total in
Japan, and is a key industry for achieving carbon neutrality nationwide.
■ Energy-related CO 2 emissions in Japan(in 2020, after allocation of pow er and heat)

Refineries,
power plants
8%

Other
industry
24%

Residential
17%

CO2 emissions
967.40 million
tons
Steel
13%

Commercial
and other
19%
Transport
19%

Values after emissions associated with power generation by electricity businesses are allocated to end customers according to electricity consumption.
Machinery includes the manufacture of fabricated metal products. The manufacture of chemical and allied products includes petroleum and coal products.
Based on the Ministry of the Environment, Japan’s National Greenhouse Gas Emissions Data (FY1990 to FY2020) (final figures).

Source: The Japan Iron and Steel Federation website. (in Japanese)（https://www.carbon-neutral-steel.com/about/）
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

4

Milestones of Japanese Steel Industry▶ Aiming for carbon neutrality by 2050, the industry strives to build a system to supply 10
million tons of green steel by 2030, as stated in the government’s goals. To this end, it has
been discussing investment in radical transition while assuming government support.
2023

Targetandstrategy

2024

2025

2026

2027

2028

2029

2030

2030s

2040s

S e e k mu l t i p l e o p t i o n s wh i l e p a yi n g a t t e n t i o n t o i n t e r n a t i o n a l d e v e l o p me n t t o wi n p r o mi s in g ma r k e t s , wi t h a n e ye o n c a r b o n n e u t r a l i t y b y2050

Sw iftly establish innovative technologies for hydr ogen r eduction
steelm aking, efficient usage of EAFs, and other pur poses
Sw iftly establish the gr een steel m ar ket▲ Reduce CO 2 emissions by 30%(compared to FY2013 levels)▲ Supply over 10 million tons of green steel

I n ve s t i n s h i f t i n g p r o d u c t i o n s ys t e m s f r o m b l a s t f u r n a c e s t o E A F s ( e . g . , E A F f a c i l i t i e s ,infrastructure, scrap yards)

Capitalinvestment
GX
investment

・Test and introduce innovativetechnologies
・Develop investment in cutting-edge
equipment

Introduce hydrogen reduction steelmaking technologies (e.g., COURSE50 facilities)

Intr oduce facilities to m anufactur e r educed ir on, etc.
Invest in ener gy tr ansition and r eduction(e.g., fuel transition such as in-house power plants)▲
Introduce

R & D o n h yd r o g e n r e d u c t i o n s t e e l m a k i n g u s i n g e x t e r n a l h yd r o g e n , e t c . manufacturing
processes for GX

R&D

Develop technologies

Need continuous
investment➡ First, invest more than 3
trillion yen
over the next 10 years
Not e) O per at ion cost s
will be incur r ed separ at ely
by using clean ener g y and ot her act ions.

Build the actual furnace, and testingD e ve l o p c o m p r e h e n s i ve r e g u l a t i o n s / s u p p o r t s t r u c t u r eRegulation/
structure

Energyusage

Utilize non-fossil energy switching targets in the Act on Rationalized Energy Use to promote fuel/material switching
Ensure stable procurement of electricity at internationally competitive prices( e . g . , a p p l yi n g e l e c t r i c i t y p r i c e s t o f a c i l i t a t e a n u p w a r d d e m a n d r e s p o n s e *)Promotingpublic-private
work

International
strategy

Facilitate government procurement of green steel by revising public procurement standards, facilitate emissions
disclosure, etc.

Industrial strategy Establish a platform to help Japan lead the creation of the global green
for winning the steel market(e.g., improving the environment for the use of mass balance methods, collecting international data
global market
that forms the basis of these initiatives)

Setting
international
standards* Upward demand response: efficiently using excess renewable energy to increase demand
Source: The diagram is made based on the Basic Policy for the Realization of GX: Reference Document (METI, February 2023).
(https://www.meti.go.jp/press/2022/02/20230210002/20230210002.html)
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

5

Projects Supported by the Green Innovation Fund
▶ Promoting the development of ultra-innovative technologies in the NEDO project on hydrogenutilization in iron and steelmaking processes, financed by the Green Innovation (GI) Fund.
▶ Started building a small test blast furnace (150m 3 ) in Chiba District, aiming for swift
implementation.
U l t r a - i n n o va t i v e b l a s t f u r n a c e(Carbon-recycling blast furnace)

Low-gradeiron ore

Coke C

CO2
CCUS

Hydrogen
H2
Methanation facility
Methane CH4 (CNreductant)
Oxygen O2

By-product gas

Hydrogen
H2

Hydrogen
H2

Reduction
furnace

Carbonrecycling

Blast
furnace

Development project

Sinteredore
Fe2O3

Direct-reduction steelmaking

DRI(use on-site, circulate
through a reduction
furnace, etc.)

Melt
ing
EAF

TargetReduce CO2 emissions by 50% or more(compared to conventional blast furnaces)(compared to conventional blast furnaces)

Description• Developing technology for seamless
operations
between the blast furnace and themethanation facility

PeriodTest scheduled for FY2025-2026

Electrode (-)

BurnerPreheating of
reduced iron
Cold iron source
preheated byexhaust gas

Generateelectricity
orCarbon-freeelectricity

Reduce CO2 emissions by 50% or more
• Technology to inject a large amount ofoxygen and methane

Large, high-efficiency EAF

Slag
Moltensteel
Molten steel
stirring coil

Bottom electrode (+)

Establish high-quality and high-efficiency
melting technologies• Heat compensation for hydrogen
reduction(injection of high-temperature hydrogen andrecycled methane)• Improving steel quality byfacilitating the denitrification withhydrogen gas and dephosphorization
with suppress reoxidation• Optimizing conditions
for injecting reduced gas according to
the grade of the raw material• High-efficiency melting throughburner lance, preheating of reduced
iron, and molten steel stirring

Test scheduled for FY2024-2026

Test scheduled for FY2024-2025
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

6

Multitrack Approach to Technology for Carbon Neutrality▶ A variety of technical paths and numerous challenges exist along the way to reaching carbon
neutrality (summit) by 2050.
▶ Since the fastest way to the summit is yet to be found, a multitrack approach is essential indriving technological development.
▶ Moreover, government support and collaboration with society are critical, considering thedifficulties in achieving the goal at an individual company level.
Achievecarbon neutrality

Challenge
4

Challenge
3

Challenge2

Low-cost and stableprocurement ofgreen power

Securing
high-grade cold ironsources

Low-cost and stableprocurement ofgreen hydrogen

Challenge
4

Challenge
3

Large-scale
development of CCUS
infrastructure

Low-cost and stableprocurement ofgreen hydrogen

Challenge
3

Large-scalerenovation of steel
works infrastructure

Challenge
2

Improving efficiency
Challenge
2

Challenge
1

Challenge
4

Technology to utilize
low-grade ore

Scaling up
Challenge
1

Improving quality

Challenge1

CR technologies (Oxygen
blast furnaces, large-scale
methanation)

Challenge
1

High preheating
temperature of hydrogen

High preheating
temperature of hydrogen(Carbon recycling (CR) blast furnace)

H2

Large, high-efficiency EAF

U l t r a - i n n o va t i v e b l a s t f u r n a c e

H yd r o g e n d i r e c t r e d u c t i o n
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

7

JFE Steel’s Transition: Direction and Challenges▶ Developing technologies to produce high-quality and high-functional steel in the GI Fund projectby using technologies to utilize hydrogen in the blast furnace process and direct-reduction
steelmaking as well as EAFs.
▶ Considering the transition of one blast furnace, which is to be refurbished in 2027, to alarge, high-efficiency EAF, assuming government support. Aiming for lower CO 2 emissions
and business growth.
▶ Policies on the transition after 2030 will be formulated later, taking account of issues such as
the development of plentiful, low-cost, and stable supply networks of hydrogen and power aswell as demand for green steel.
2024

Ultrai n n o va t i v eblast furnace(CR blast
furnace)2030

Small-scale
tests

Mid-scaledemonstration tests

1:25 scale

1:4 scale(considering hydrogenprocurement at approx. 100,000t o n s / y e a r w i t h M C H *1, e t c . )[GI Fund] Develop process
Utilizinghydrogenthroughdirectreduction
steelmaking

EAF

CCUS *2

CO 2[GI Fund]Develop highquality steel
manufacturingmethods

CO 2

Supply low-carbon,
high-grade
direct-reduced iron

Improvequality,increasesize*2 CCUS: Carbon dioxide Capture, Utilization and Storage*3 CCS︓Carbon dioxide Capture and Storage

Implement

Hydrogenreduction

Implement in
2027

Develop a low-cost,stable green power
supply network

Under consider ation

Deployment
optimum×β
processes basedon thedevelopment
status of green
infrastructure×γ
and process
costs

Consider expans ion within andoutside Japan

CO 2

CO 2

2050
×α

CO2

Implement

FY2023
Started a joints t u d y o n C C S *3
in Malaysia

2040

Supply a large amount ofhydrogenSupply a large
amount of hydrogen
H2<In Japan><Outside Natural gas
reduction
Japan>＋CCS*3

Supply alarge
amount ofhydrogen

CO 2*1 MCH (Methylcyclohexane):
CO2 emitted
a hydrogen carrier composed of liquid made by adding hydrogen to toluene
through the blast Implement
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.
furnace process
8Concept of 2027 Transition in Kurashiki▶ Production efficiency and product quality are major challenges in the transition from blast furnaces
to EAFs.
▶ Aiming for the large-scale supply of green, high-quality, and high-functional steel by overcoming
challenges in the large-scale high-efficiency EAF (innovative EAF) under consideration.
▶ Direct-reduction iron is essential in producing high-quality steel in EAFs. Planning to procureiron sources from the Middle East, which is a suitable location for solar power generation,
CCS, and green hydrogen production.

Cokingcoal

Current

Importmaterials

Iron ore

Existing
EAF

Blast
furnaceScrap
in JapanEmirates PJ

Innovation
processIronore
FutureDirectreduction＋CCS

Reduced I m p o r tiron m a t e r i a l s

Conve
rter

Convention al
steel

GeneralEAF
purpose steel
Large, high-efficiency
EAF in Kurashiki

EAF

Highquality
green steel

Shift to carbon-neutral reduced ironby using renewable energy andgreen hydrogen

Production
efficiency

Product
quality

CO 2
emissions

High

High

Large

Low

Low

Small

Low
→
High*1Low→
High*1

Small*2→
Zero*3*1 Improved through JFE Steel’s technologicaldevelopment*2 Natural gas reduction + CCS*3 Green hydrogen reduction + renewable energy
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

9

Large, High-efficiency EAF in Kurashiki: Investment
Overview▶ The Kurashiki EAF applies innovative technologies being developed in the GI Fund project such as
high-quality and high-efficiency melting technology, as well as technology uniquely developed by
JFE Steel.
▶ By introducing these technologies and utilizing Green Ferrous Material, the company will be the firstto build a large-scale supply system for green, high-quality and high-functional steel comparable tothat produced through the blast furnace process, which has been extremely difficult to achieve inexisting large EAFs.

■ Large, high-efficiency EAF

Inductionpreheating
technology Expected time

Renewable energy(Utilizing the upward
demand response*1)

FY2027to start
operations
AnnualApprox. 2 million
production
tons/year
Reduced iron
Up to 50%
to be used
Approx. 2.6 million
CO2 reduction
tons/year

FurnacesensorHeat-efficientburnerHigh-speed
melting technology*1 Upward demand response: efficiently using excess renewable energy to increase demand■ UAE project on direct-reduced iron
CO2

Expected time
Second half ofCOto start
FY2025 or later
operations
Annual
2.5 million
COCO
Naturalproduction
tons/year
gas
Natural gas (+CCS (EOR *2 )DirectReduction
CCS)
reduced iron
→ Using hydrogenmethod*2 Enhanced Oil Recovery
in the future

Emissions
intensity[t-CO
3.0
2 /t ｰ steel]

2.5* Evaluated as Scopes
1+2+3 emissions

2.0
1.5
1.0

2.0〜2.5
1.0~1.5

0.5
0.0

BF-BOF

EF+HBI

0.5~
EF+HBI
with CCS(BF: blast furnace; BOF: converter; EF: electric
furnace; HBI: reduced iron)

Ultra-innovative EAF + Green
Ferrous Material

2

2

2

Produce green, high-quality steel
comparable to that produced
through the blast furnace process
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

10Large, High-efficiency EAF in Kurashiki: Innovation▶ Achieving production efficiency comparable to that of the blast furnace process by introducing oneof the largest EAFs in the world and applying high-efficiency melting technology currently being
developed.
▶ Also aiming to produce high-quality and high-functional steel that has been impossible for existing
EAFs to produce, such as electrical steel sheets and high tensile steel sheets, not only through JFE
Steel’s accumulated refining technology but also through the development of quality-improving
technology using the GI Fund.
■ Improving efficiency and■ Improving quality
increasing size
Density of difficult-toExisting EAFs
350
remove impurities[10,000 tons/year]

Production capacity

300(Plan)
Kurashiki
EAF

250
200

0.6% Kurashiki
EAF
Steel bars

0.4%

150

Special steel bars
and rods
Sheets for building
materials
Sheets for automobiles
Electrical steel sheets

100
50
0

0.2%
0

100

200

300

400

Heat size [t/ch]

Establish high-efficiency melting technology
through innovative processes, including
heat-efficient burners, molten steel stirringcoils, and induction preheating.
Source: German Steel Association’s database on world steel companies (2018 edition), edited by JFE Steel.

Blast furnace Prompt
steel
scrap

Obsolete
scrap

Establish technologies to reduce the impact of
impurities contained in scrap (tramp elements)
and to achieve levels of phosphorus andnitrogen comparable to the blast furnace
process.
Source: Jones, A.J.T., Assessment of the Impact of Rising Levels of Residuals in Scrap,
Proceedings of the Iron & Steel Technology Conference (2019), edited by JFE Steel.
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

11

Progress on the Emirates Project▶ An agreement was signed on July 17, 2023, stating that Abu Dhabi Ports Group (ADPG)
will participate fully in project *-related port development and operations, land leasing
and services, and infrastructure development.
▶ Collaboration with ADPG will provide the undertaking with access to a suitable site forbuilding a distribution & logistics system capable of stably importing raw materials andshipping products for the envisioned supply chain of Green Ferrous Material.
*On September 1, 2022, JFE Steel signed an agreement with Itochu Corporation and Emirates Steel
Arkan to jointly conduct detailed feasibility studies on the establishment of a supply chain for the Ferrous
Raw Material for Green Ironmaking with Low-carbon Emissions (Green Ferrous Material) at the projectsite in Abu Dhabi.

UAE

On July 17, 2023
MOU exchange ceremony held during the Japan-UAE Business Forumin Abu Dhabi, UAE, in the presence of Prime Minister Fumio Kishida
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

12

Progress on the CO 2 Emissions Reduction Plan
▶ Moving forward according to the FY2022 plan, achieving a 13% reduction. Also expecting toachieve the FY2024 year end target.
▶ Making solid progress in investment approval and implementation to achieve the reduction targets.
Already approved for approx. 110 billion yen by FY2022.
(million tons)
▽ 13%
▽ 18%
▽ 30% or more
58.10(▽ 7.72 million tons)(▽ 10.50 million tons)(▽ 17.40 million tons)
7.72

50.38

2.78

47.60
.
6.90

FY2013Emissions
ResultFY2022Emissions
ResultAiming for 18% reduction by the end of FY2024(KPI progress up to FY2022)

 Capital investment
Completed approval for 90% of total CO 2 reduction in theinvestment plan against the CO 2 reduction target *through energy savings and technological development→ Completed approval for 88% of the total
investment plan Emissions reduction
Achieve 50% of the CO2 reduction target* through energy
savings and technological development→ Achieved 58% of the CO 2 reduction target* CO 2 reduction through energy savings and technological development: 3.00
million tons

End of
FY2024
Target40.70
FY2030TargetAiming for 30% or more reduction by FY2030
Energysavings andhighefficiency

Low-carbon
feedstock &fuel
Utilizing
EAFs

・Upgrade to high-efficiency coke ovens inFukuyama (▽ 16)
・Improve efficiency of power demandfacilities
・Leverage AI & DS
・Expand the use of scrap in converters(▽ 150)・Use reduced iron in blast furnaces
and converters ( ▽ 200 )・Sendai: Upgrade existing EAFs ( ▽ 1 0 )・Chiba: Introduce EAFs for SUS ( ▽ 4 5 )・Kurashiki: Large, high-efficiency EAFs(▽ 260)* The projects in blue bold font are already approved. Numbers inparentheses indicate the amount of reduction (10,000 tons/year).
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

13

Carbon Neutrality Plan
(Innovation Period)••••

J F E S t e e l ’s Tr a n s i t i o n : D i r e c t i o n a n d C h a l l e n g e s
Necessity of Developing an Ultra-innovative Blast
Furnace Process
Necessity and Initiatives of CCUS
Initiatives for Hydrogen Procurement

Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

14

JFE Steel’s Transition: Direction and Challenges▶ Developing technologies to produce high-quality and high-functional steel in the GI Fund projectby using technologies to utilize hydrogen in the blast furnace process and direct-reduction
steelmaking as well as EAFs.
▶ Considering the transition of one blast furnace, which is to be refurbished in 2027, to a large,
high-efficiency EAF, assuming government support. Aiming for lower CO 2 emissions andbusiness growth.
▶ Policies on the transition after 2030 will be formulated later, taking account of issues
such as the development of plentiful, low-cost, and stable supply networks of hydrogenand power as well as demand for green steel.
Supply alarge
amount ofh yd r o g e n

2030
Ultrai n n o va t i v eblast furnace(CR blast
furnace)Utilizinghydrogenthroughdirectreduction
steelmaking(considering hydrogenprocurement at approx. 100,000t o n s / y e a r w i t h M C H *1, e t c . )

2040

2050
×α

Implement

Supply a lar ge am ount of hydr ogen

Supply a large
amount of hydrogen

CO 2

CO 2

H2

CO2

Hydrogenreduction

Develop a low -cost,stable gr een pow er
supply netw or k

EAF

Deployment
×β
optimum processes
based on thedevelopment statusof green
infrastructure and×γ
process costs

Consider expansion w ithin
and outside Japan

CO 2

CCUS *2CO 2*2 CCUS: Carbon dioxide Capture, Utilization and Storage*3 CCS︓Carbon dioxide Capture and Storage

CO 2*1 MCH (Methylcyclohexane):a hydrogen carrier composed of liquid made by adding hydrogen to toluene

Implement

Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

15

Necessity of Developing an Ultra-innovative Blast Furnace Process (1)▶ The blast furnace process is an extremely efficient ecosystem, effectively using all the byproduct gas (energy) generated in the production process to heat steel and generate power.
▶ Transitioning all processes, for example to direct-reduction steelmaking, will require thecomplete renewal of facilities for upstream processes, which account for approximately 50% of
steel works, while also reducing the generation of by-product gas, making it difficult to rebuild
an efficient ecosystem.
▶ In order to utilize existing business resources, technological development of the ultrainnovative blast furnace process is also an important approach, aiming to reduce emissions to
the extent possible.

Fuel for heating

Coal

Electricity

0.1

100%
efficient use
Joint thermalpower

W e s t J a p a n W o r k s ( F u k u ya m aDistrict) 14.20 million m2

Iron ore

0.4-0.7
SinteringmachineCoke oven
By-product gas
Blast furnace

1.11.8(Kasaoka Area)

Upstreamprocesses(ironmaking andsteelmaking)(equivalent to the area of Meguro-ku, Tokyo)

Approximately 80% of CO2 generated in thesteelmaking process derives from theiron ore reduction process in blast furnaces.

0.2-0.3
Continuous
casting
machineConverterDow nstream
processes (rolling)HotrollingHeating
furnaceColdrolling* The numbers in the diagram indicate the CO2
emissions intensity (t- CO2 /t) in each process.

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16

Necessity of Developing an Ultra-innovative Blast Furnace Process (2)▶ Of the 1.9 billion tons of crude steel produced around the world, approximately 72% is
supplied through the blast furnace process, mainly in Asia.
▶ Steel demand is expected to continue growing along with economic growth and population
growth, and scrap alone will not be sufficient to meet the demand.
▶ In order to fulfill the responsibility to supply a large amount of high-quality and highfunctional steel, it is important to utilize existing business resources and maintain theultra-innovative blast furnace process, aiming to reduce emissions to the extent possible.
■ Projected global crude steel production and scrap
generated■ Crude steel production by process Development of ultra-innovative blast furnace technology canalso make a significant contribution to reducing emissions in
Asia, where blast furnaces dominate.

Asia

Europe51%

EAF

 T h e a mo u n t o f s cr a p g e n e r a t e d is a p p r o xi ma t el y 1 / 3 o f c r u d e s t e el
production.
 Cr u d e s t e el p r o d u c ti o n f r om ir o n o r e will b e n e c e ss ar y i n t h e
f u t u r e a s we l l .

[100 million tons/year]

30

25

1.8

18%

13.8
100
milliontons

Blast
furnaceprocess

82%

100 million
tons

49%

North America

27%

20
10

19

21

Crude steel
production

scrap
generated

8

6

10

1.1

100 million
tons

73%
Source: Data in 2023 World Steel Figures, edited by JFE Steel.

0

FY20

FY30

FY50

Source: Global Trends in Demand for Steel Scrap (2021, The Japan Ferrous Raw Materials
Association) and Iron and Steel Technology Roadmap (2020;IEA), edited by JFE Steel.
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

17

Necessity and Initiatives of CCUS
▶ Carbon-recycling blast furnaces aim to reduce CO 2 by 50% or more, and achieving carbon neutrality
requires the use of CCUS * .
▶ Started joint evaluation on the establishment of a CCS value chain originated from Japan, alignedwith the CCS study in Malaysia▶ Accelerating discussions aiming to expand inter-company collaboration within and outside Japan, in
addition to this project■ Necessity of CCUS in the Japanese steel
industry
Emissions intensity[t-CO 2 /t ｰ steel]

2.5

Emissionssource* Evaluated as Scopes
1+2+3 emissions

Separate,
captureLiquify, store

Ship,transport

Inject▽ 50% ormore

2.0

Carbonneutrality

1.5
1.0
0.5
0.0

■ Initiatives to operationalize CCS• Started an FS
aiming to build a facility at a steel works to separate, capture, liquify,
store, and ship CO 2
• Target: 1 million tons by the end of 2029, and 4 million tons by 2034

* Assuming that the project budget is 500 billion yen■ Initiatives to expand inter-company
collaboration
Existing blast
furnace process

CR blast furnace

Use of CCUS

Despite efforts to implement ultra-innovative technologies
and transition to carbon-neutral energy, it is still difficult
to completely eliminate CO 2 emissions from manufacturing
processes.

Studying possible collaboration among emitting companies

Thermalpower plant

Joint study on separation, capture,transportation, and storage of CO2 topursue efficient CCS
Inject CO2

Steel works

Transport CO2 byship

May need up to 20 million
tons of CCUS
* CCUS︓Carbon dioxide Capture, Utilization and Storage

Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

18

Initiatives for Hydrogen Procurement▶ Taking advantage of the location of the Mizushima Complex, West Japan Works (Kurashiki
District) and ENEOS Corporation, which is situated adjacent, have started a joint study onhydrogen utilization, aiming to build a hydrogen supply chain by 2030. (up to approx.
100,000 t-H 2 /year)▶ Using for a mid-scale CR blast furnace demonstration and for fuel decarbonization.
■ Hydrogen procurement■ Hydrogen utilization at the Mizushima Complex(ENEOS Corporation)

Also collaborate with various initiatives related to the promotion of carbon neutrality
throughout the area

Hydrogen
Up to 100,000 tons/year

JFE Steel Corporation
Kurashiki District

Middle East

Transport
MCH

Use the existing
facilities ofthe Mizushima
refinery

ENEOS

Southeast Asia

Dehydrogenate
MCH

Australia

Receive
MCH
Capture toluene

ENEOS

MCH* dehydrogenation
MCH → hydrogen and toluene

Heat

Possibility ofusing exhaust
heat at steel
works* MCH (Methylcyclohexane): a hydrogen carrier composed ofliquid made by adding hydrogen to toluene

Transport
MCH
MCH production base(transport and reuse toluene)

Utilize chemical
tankers
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

19

CO 2 Reduction
Through Steel Products•

Necessity of Green Steel During the Transition Period•

Strategy to Stimulate Demand for Green Steel•Contributing to CO2 Reduction Through Green Steel JGreeX™

•

Adoption of JGreeX™: Achievements•

Business Growth Strategy through the Supply of Green Steel•Contributing to CO2 Reduction by Expanding Electrical Steel
Sheet Production Capacity•

Contributing to CO2 Reduction through Large and Heavy Steel
Plates for Offshore Wind Power

Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

20

Necessity of Green Steel During theTransition Period▶ It takes time and money to establish ultra-innovative steel processing technologies aiming for zero
emissions as well as to develop social infrastructure such as green hydrogen and power. Meanwhile,the steel industry, as the largest emitter, needs to continue making the utmost efforts to reduce
emissions.
▶ Proper evaluation needs to be conducted on the (environmental) value of the actual emissions
reduction using energy-saving and low-carbon technologies during the transition period.
▶ In order to meet demand for green steel in the transition period, it is essential that the massbalance approach is applied, allocating CO 2 emissions reduction to any steel products.
■ Reducing the CO 2 emissions intensity of steel products: image
Transition period

Innovation period(introducing energy-saving and low-carbon technologies)(accelerating ultra-innovative technologies → implementing them in society)

Stimulate demandU s e t h e r e d u c t i o n va l u e
t o r e i n ve s t i n i n n o va t i o ntechnologies

Supply green steel(mass balance approach)

Drastically expand the
supply capacity of green
steel

CO2 emissions intensity(reinvest)• Energy savings and high efficiency of
existing blast furnaces• Large, high-efficiency EAFs

2020

1. 2020~2030• Reduction using externalhydrogen• CCUS• 100% hydrogen direct
reduction• Reduction using on-sitehydrogen• Partial hydrogen direct
reduction, etc.
2. 2030~2040

3. 2040~2050

2030

2040

Source: The diagram was created based on the Technology Roadmap for “Transition Finance” in the Iron and Steel Sector (METI, October 2021).
(https://www.meti.go.jp/policy/energy_environment/global_warming/transition/transition_finance_technology_roadmap_iron_and_steel_jpn.pdf)

2050

Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

21

Strategy to Stimulate Demand for Green Steel▶ Actively implementing activities for standardization and development of business models inorder to stimulate demand for green steel.
■ Initiatives for setting international standards
Proposal at Worldsteel
Effectiveness and necessity of setting international standards for emissions calculation methods andadopting the mass balance approach (April and October 2023)

Agreement at the G7 Ministers’ Meeting on Climate, Energy and Environment
Started working on implementation of the new Global Data Collection Framework related to the GHG
emissions of steel products (April 2023)■ Initiatives for formulating industrial rulesCollaboration between the JISF and three blast furnace companies
Formulated green steel guidelines applying the mass balance approach (September 2022)
Formulated detailed green steel guidelines aiming to promote the mass balance approach (October 2023)

Participation in the GX League
Publishing recommendations on adding value to green products (scheduled for November 2023)■ Initiatives as an individual company
Starting supply of JGreeX T M
Started supplying green steel, applying the mass balance approach (September 2023)



Development of a model to share CO 2 -reduction costs throughout society
Became the first in the world to develop a model to broadly share CO 2 -reduction costs across the supply
chain (June 2023)
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

22

Contributing to CO2 Reduction Through Green Steel JGreeX™
▶ Started supplying green steel JGreeX ™ , which emits significantly less CO 2 thanconventional products, in 1H of FY2023.
▶ The steel mass balance approach is applied to JGreeX TM to calculate CO 2 intensity andreduction level of steel product based on ISO standard, ensuring additionality andtransparency with third-party certifications.
■ Overview of green steel JGreeX TM■ Overview of the steel mass balance approachgreen steel

CO2 reduction

CO2 reduction
Conventional
steel

JGreeX (JFE + Green + GX)
Supply startFirst half of FY2023

Pooling
CO2 emissions reduction effects acrossJFE Steel

STEP.1
Calculate the emissions intensity of any steel product to apply

Supplycapacity

Approx. 200,000 tons (FY2023)

Targetproducts

All steel products produced by
JFE Steel

Certificationbody

this approach
STEP.2
Identify emissions reduction projects and determine theiremissions reduction levels
STEP.3

Nippon Kaiji Kyokai (ClassNK)

Issue a reduction certificate based on the determined reductionlevel, grant the certificate, and supply steel materials.

※ In addition to blast furnace companies in Japan, ArcelorMittal, Thyssenkrupp, and POSCO have also developed products as green steel brands based on themass balance approach, and started selling them in some areas.
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

23

Adoption of JGreeX ™ : Achievements▶ With recognition of the value of green steel JGreeX TM in reducing CO 2 , the products have been
adopted in ships (14,000 tons ) , buildings (200 tons ) , and grain-oriented electrical steel sheets fortransformers manufactured in Europe (300 tons ) .
▶ Became the first in the world to develop a model to broadly share CO 2 -reduction costs acrossthe supply chain, while also contributing to consumers’ Scope 3 emissions reduction.
■ Developing a model to share CO 2-reduction
costs throughout society■ Contributing to reducing the lifecycle carbon footprintof buildings• Becam e the first in the w orld, together with eight
Japanes e shippin g companies, to develop a model tobroadly share CO 2 -reduction costs across the supply
chain• Sales volume: 14,000 tons

• Contributing to CO 2 reduction in manufacturing
materials for new buildings• Sales volume: 200 t o n s<Scope3>

Manufacturing
materials

NYK Bulk & Pr ojects Car r ier s, Ltd.,MOL Dr ybulk Ltd., Toko Kaiun Kaisha, Ltd.,Kaw asaki Kisen Kaisha, Ltd., Kaw asaki Kinkai Kisen
Kaisha, Ltd., Daiichi Chuo Kisen Kaisha, Ltd., Daiichi
Chuo Kinkai Kaisha, Ltd., and Easter n Car Liner , Ltd.

<Scope1+2>

Construction

Operation<Scope3>

Renovation

Disposal*1 Advanced buildings aiming for ZEB (Net Zero
Energy Building)
ZEB Ready*1, with enhanced exterior skinscheduled to obtain the certificate
insulation and energy-efficient equipment

Shipper

Shipbuilding
company

Ship

Shipping
company
Chartered
ship

Extra

Transport

JFE
Steel
Other than
JFE

Ship owner
Cost passthroughFinancing

JFE
Steel

Bank

User

(tentative name) Suidobashi
PREX Project
Operator

Sumitomo Corporation

Designer
Kumagai Gumi Co., Ltd.
and(scheduled)executor
Building
structure

Steel structure, 10 floors
above ground
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

24

Business Growth Strategy through the Supply of Green Steel▶ Increasing the mix of highly value-added products such as high tensile steel sheets andelectrical steel sheets to 50+%, shifting the focus from Quantity to Quality, and aiming forbusiness growth by shifting from high-quality steel to green steel.
▶ Expanding the supply capacity of green steel is critical for maintaining and expanding theinternational competitiveness of not only the domestic steel industry but also consumer
industries, including automobiles and electronics.
■ Medium-term business growth strategy■ Green steel supply: image
green steel

Expand margins and achieve stable profit
by shifting the focus from Quantity to Quality
Increase the mix of highly value-added products* to 50+%
* Products that offer technological advantages, arerecognized by customers for their value-added, andhave greater earnings power than commodity products
FY2022 non-consolidated steel shipments: 21.74 million tons

Highly valueadded products

Commodity
products
10 million tons▼

Highly valueadded products• Expand the supply capacity of green steel
by swiftly implementing ultra-innovativetechnologies

20 million tons▼

Commodity
products(Green steel)<Highly value-added products: main examples>

FY2023 supply
Approx.
200,000 tons
(obtain third-partyc e r t i f i c a t i o n *)Kurashiki▼High grade
electrical steel
sheetsHigh tensile steel for automobiles

Steel for offshore
wind power** Nippon Kaiji Kyokai(ClassNK)▼: Conversion

FY30

FY50
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

25

Contributing to CO2 Reduction by Expanding Electrical
Steel Sheet Production Capacity▶ Contributing to CO 2 reduction by increasing the production of top-grade non-oriented electricalsteel sheets (NO) used for primary motors of EVs and HEVs that are growing in demand
globally.
▶ JSW and JFE Steel have jointly established a new company, JSW JFE Electrical Steel Private
Limited, to manufacture and sell grain-oriented electrical steel sheet (GO). It is the first in India
to manufacture high-grade GO in an integrated manner, contributing to greener energy network
enhancement projects.
■ Expanding non-oriented electrical steel
sheet production capacity(Kurashiki District)■ Establishing a joint venture company forgrain-oriented electrical steel sheet(JSW in India)

News release in
April 2021
CAPEX

Approx. 49.0 billion yen

Expected
time tostart
production

First half of FY2024

Production
capacity

Doubling the facility’s existing capacity for
producing top-grade NO for EV primary motors

Providetechnology

News release in May
2023
CAPEX

︓

50%

Investment
ratio

Approx. 46.0 billion yen

50%

Supply sheets

Company manufacturing and selling grain-oriented electrical steel sheet (GO)Expected
time tostart
production

By the end of FY2026

Production
capacity

Tripling the facility’s existing capacity for
producing top-grade NO for EV primary motors

JSW JFE Electrical Steel Private Limited
Total investment: 670 million US dollars

JSW Steel Limited’s Vijayanagar facility

C o n t r i b u t i o n t o C O 2 r e d u c t i o n ( t o t a l ) *: A p p r o x . 4 . 8 m i l l i o n t o n s / y e a r* :C o n t r i b u t i o n

t o

C O 2

r e d u c t i o n

r e s u l t i n g

f r o ma n

i n c r e a s e

i n

E V s

( e s t i m a t e d

b y

J F E

S t e e l )a n df r o mt r a n s m i s s i o n

r e p l a c e m e n t( e s t i m a t e d

b y

J F E

S t e e lb a s e do n

J I S Fd a t a )Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

26

Contributing to CO2 Reduction through Large and Heavy
Steel Plates for Offshore Wind Power▶ The Japanese government has positioned offshore wind power generation as a key factor for
carbon neutrality.
▶ J-TerraPlate ™ , a large and heavy steel plate produced and supplied by JFE Steel, has been
selected for the first time for the production of bottom-fixed monopile foundations for offshore
wind power generators.
▶ The JFE Group (JFE- Gr) will continue its groupwide efforts to promote the expansion of green
energy, aiming to contribute to the decarbonization of society as a whole.
■Overview of a land-based offshore
wind power generator■ Strengths of JFE-Gr in monopile manufacturing
From the production of large and heavy

Transition pieces• Diameter: 9 to 11 meters• Weight: Approx. 500 tons

Integrated

Blademanufacturing andWind turbine

operation

100m

steel plates for offshore wind power (JTerraPlate™) and the manufacture ofbottom-fixed monopile foundations to O&M
in an integrated manner

260m
Size of

Tower

Monopiles• Diameter: 9 to 11
meters• Weight: Approx. 1,400
tons

Facilities capable of manufacturing large

large and heavy

and heavy steel plates for the largest-

steel plates

scale offshore wind power plants in Asia

<Large and heavy
steel plates>••<Conventional
products>

Fewer welds
Longer tubes••

More welds
Shorter tubes

30m
Sea
Mud

80m

 Reduction of welding, reduction of assembly man-hours, shorterproduction lead time
C o n t r i b u t i o n t o C O 2 r e d u c t i o n ( e x p e c t e d ) *: Ap p r o x . 1 . 2 m i l l i o n t o n s / y e a r

Ground*: Contribution to CO2 reduction resulting from the introduction of offshore wind power
generation (estimated by JFE Steel based on JISF data)
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

27

CO 2 Reduction
Through Efficient Use of
Resources••

Contributing to a Recycling-based
S o c i e t y b y R e c y c l i n g P l a s t i c Wa s t eContributing to Biodiversity ThroughSteel Slag Products

Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

28

Contributing to a Recycling-based Society by
Recycling Plastic Waste▶ The steel industry is promoting reductions in CO 2 emissions by recycling waste plastic,
which is normally incinerated.
▶ In addition to conventional domestic plastic waste under the recycling law *1, JFE has also
started utilizing industrial plastic waste *2, accelerating its efforts by increasing the types ofplastic waste and the amount of alternative utilization.
JFE Group
JFE Steel Corporation
Household trash(governments)
Conventional
Plastic waste under
the recycling law *1
Incinerator

Use as an alternative to coal (for coke ovens)

Chemicalrecycling

Plastic waste 1.0 tons
⇒ Reduc e coal use by 0.9
tons

Existing management facility
Com m er cial tr ash(businesses)
Industrial plastic

New
expansion

New management facility
・ E s t a b l i s h a s p a r t o f t h e l a r g e - s ca le r e c yc l i n g c e n t e r b u i l t i n Mi z u e ,K e i h i n D i s t rict o f E a s t J a p a n W o r ks

waste *2
Incinerator

CO 2 reduction: Approx. 160,000 tons/year (for new expansion)*1 Plastic waste specified in the Act on the Promotion of Sorted Collection andRecycling of Containers and Packaging*2 Plastic waste derived from industrial waste

Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

29

Contributing to Biodiversity Through Steel Slag
Products▶ Created a seaweed bed in Shinto, Iwakuni City, Yamaguchi Prefecture, by utilizing Marine
Stone ® , a steel slag product for marine areas.
▶ Obtained J Blue Credit ®*1 certification for approximately 80 tons of CO 2 captured by blue
carbon *2 .
▶ Promoting contribution to the preservation of biodiversity by utilizing steel slag productsthat are helpful for the recycling-based society.
*1: Established by the Japan Blue Economy Association (JBE) in 2020. It is a credit system certified, issued, and managed by the JBE through an independent committee review.
*2: Carbon captured by marine ecosystems, such as marine plants and seaweed beds. It is a new term coined by the UNEP in October 2009 as a new carbon sink.

■ Obtaining J Blue Credit ® certification◎ Cr eation of a seaw eed bed in Shinto, Iw akuni City
• Used Marine Stone® to create and expand a base for the growthof a rocky reef seaweed bed■ Initiatives in Tokyo Bay◎Collaboratio n with Yokohama City to enrich the ocean• Collaborating with Yokohama City to promote the improvementof marine habitats by using steel slag products• Utilizing it for education and research. Confirmed the co-benefitsof seaweed bed creation, including fish attraction.

Location of the seaweed bed

Test Area C
Seaweed bed
Iwakuni City, Yamaguchi Prefecture

Test Area B

Test Area A

BeforeMarine Stone®

After
Education on the seashore
Confirmed improvement in marine habitats through the use of steel slag products
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

30

East Japan Works(Keihin District)
Land Use Scheme••

JFE-Gr Land Use Scheme: “OHGISHIMA 2050”
Carbon Neutrality Business in OHGISHIMA 2050

Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

31

JFE-Gr Land Use Scheme: “OHGISHIMA 2050”▶ Developed OHGISHIMA 2050 as the land use scheme of East Japan Works (Keihin District)after the suspension of its upstream process, including blast furnaces, along with
implementation of structural reform to build the optimum production system in Japan.
▶ Contributing to the sustainable development of local communities and society by creating new
industries and employment for the next 100 years, realized through the creation of a field totake on new challenges to achieve carbon neutrality and innovation.
Concept of land use* Details of OHGISHIMA 2050 (in Japanese)
https://www.jfe-holdings.co.jp/release/2023/09/pdf/230907.pdf

Aim to solve the country’s key issues and help sustainable
development of the Keihin coastal areaThe city leading Japan’s carbon neutrality(forming a supply base for next-generation energy, including hydrogen) T h e c i t y o f i n n o va t i o n h e l p i n g n u r t u r e n e x t - g e n e r a t i o n i n d u s t r i e s(promoting the implementation of future technologies in society) T h e c i t y o f r e s i l i e n c e h e l p i n g d i s a s t e r p r e ve n t i o n i n t h e m e t r o p o l itan area(Contribution that takes advantage of convenient access)(Ohgishima District in 2050: perspective drawing)
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

32

Carbon Neutrality Business in OHGISHIMA 2050
▶ The lead area will utilize deep water berths to form a hydrogen supply base, leading tocarbon neutrality and land use conversion for the entire area.
▶ In another area, a shared urban space with abundant greenery will be created as a central
axis, equipped with the latest infrastructure supporting DX and GX.
On both sides of the space, the next-generation industry zone and the integrated
development zone will be created, aiming to build up next-generation industries andfacilities.
▶ Considering new carbon neutral businesses across the group

Zoning and business use by the JFE Group
Cooperation with companies located in Ohgishima(showing current business activities)

Carbon neutral business CO 2 business (EN, ST, SH)*
• Business involving collection andshipment of CO2 emitted by nearby
energy companies, etc. (CCUS)
 Electricity business (ST, EN)• Business to generat e, store, and sellclean electricity by introduc ing hydrogenat power plants

Carbon neutral energy zone Business participation in the supply chains of hydrogen, ammonia, etc.
(ST, EN, SH)• Ohgishima, located in the Kawasaki coastal
area, was selected as the leading candidate
to host test projects aiming to build a largescale hydrogen supply chain.
* ST: JFE Steel; EN: JFE Engineering; SH: JFE Shoji
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

33

Collaborating with Society
on Carbon Neutrality

Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

34

Collaborating with Society on Carbon Neutrality▶ While achieving carbon neutrality is a top management priority for JFE Steel, generating
environmental value involves large investments and cost increases associated withtransitioning, requiring efforts beyond the private company level.
▶ Mechanisms are needed so that society, as the beneficiary of green steel, helps to cover the associatedcost increases through government support, collaborative initiatives, etc.
Initiatives as a private company

Necessary government support• Solidly execute ultra-innovativetechnologies and formulate plans to
implement them in society• Clarify detailed frameworks andschedules on long-term government
support for large-scale R&D costs
and capital investments• Raise public awareness ofenvironmental value created throughgreen steel, applying the massbalance approach<Green steel guidelines and setting international
standards>(The Japan Iron and Steel Federation, World Steel
Association)• Visualize environmental value andparticipate in the implementation of
the new Global Data Collection
Framework agreed upon by the G7• Formulate a plan to develop
infrastructure for the low-cost, stable,
large-scale supply of carbon-freehydrogen and electricity• Formulate a plan to develop CCUS
and green infrastructure throughcollaboration with industrial
complexes, corporations, etc.

Achieve economic
grow ththrough decarbonization

Build a competitive
advantage
throughgovernment-private
collaboration• Ensure government support comparable tothat in Europe and the US (e.g., subsidies,tax mechanisms) and international
competitiveness of industrial electricity
prices• Provide support for building a greenhydrogen supply chain that will
become the new infrastructure• Take measures to stimulate demand
for green steel, which has highenvironmental value, throughprocurement support (e.g., public
procurement)• Relax the application of competition
laws in order to not hinder thepromotion of innovation and joint
efforts by companies
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.

35

This document is not a disclosure document under the Financial Instruments and Exchange Act, and we do not guarantee the accuracy orcompleteness of the information. In addition, the projections and other information presented are based on information available at the time ofthe presentation and contain uncertainties. Therefore, please refrain from making investment decisions based solely on this material. The
Company assumes no responsibility whatsoever for any losses incurred as a result of using this material.
Copyright © 2023 JFE Steel Corporation. All Rights Reserved.