JFE Steel Corporation
Carbon Neutrality Strategy Briefing
September 1, 2022

Copyright © 2022 JFE Steel Corpora5on. All Rights Reserved.

4 Multitrack R&D Targeting Ultra-innovative
Technologies
・Challenges in Developing CO2 Reduction for Steelmaking

16

・Development Project Supported by Green Innovation Fund

18

・Overall Scale of GI Fund Projects

19

・GI Fund Project for Reducing CO2 via CR Blast Furnaces

20

・Carbon Neutrality Plan for Japanese Steel Industry 04

・GI Fund Project for Direct Hydrogen Reduction

21(METI)

・GI Fund Project for Large, High-efficiency EAFs

22

１ Carbon Neutrality Plan

・JFE Steel’s Transition to Low-carbon Processes

05

・JFE Steel’s Carbon Neutrality Vision 2050

06

2 Carbon Neutrality Action Plan
・Carbon Neutrality Action Plan08

3 30% Less CO2 Emissions by 2030

5 Initiatives for Effective Use of CO2
・CCUS and Green Infrastructure Initiatives

24

・Port Initiatives Carbon Neutral

25

・CO2 -based Methanol Synthesis

26

・Storing CO2 in Steel Slag

27

6 Collaborating with Society on Carbon Neutrality

・Transition to Low-carbon Steel Processes

10・Expand Use of Scrap in Converters

11

・Expand Use of Scrap in EAFs

12

・Stimulating Demand for Green Steel

29

・Direct-reduced Iron Feasibility Study

14・Initiatives for Collaborating with Society

30

・New Teams Overseeing Carbon-neutrality Promotion

31

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

2

Carbon Neutrality Plan
• Carbon Neutrality Plan for Japanese Steel Industry (METI)• JFE Steel’s Transition to Low-carbon Processes• JFE Steel’s Carbon Neutrality Vision 2050

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

3

Carbon Neutrality Plan for Japanese Steel Industry (METI)▶ Multitrack approach to develop ultra-innovative technologies that will help the Japanese steel
industry achieve carbon neutrality by 2050
▶ During the transitional period, expand the use of scrap via conventional technologies (energy
savings, high efficiency, etc.), electric arc furnace (EAF) process, etc.
▶ Implement ultra-innovative technologies from 2040 aimed at major reductions in CO2 emissions
2020

2025

2030

2035

2040

2045

2050

Further energy savings and increased efficiency via existing technologies (expand use of scrap, IT, exhaust heat recovery, etc.)

Blast
furnaces

Hydrogen reduction steelmaking:use of on-site hydrogen

Hydrogen reduction steelmaking:use of external hydrogen

CO2 separation, capture, and use

Electricarc
furnaces(EAF)

Further energy savings and increased efficiency via existing technologies (install high-efficiency arc furnaces, implement exhaust
heat recovery, etc.)

EAFs: Technologies for removing impurities and making furnaces larger• Energy savings & greater
efficiency in existing
furnaces• Ferro-coke, etc.

• Reduction using on-sitehydrogen (COURSE50)• Partial hydrogen direct
reduction, etc.

• Reduction using external hydrogen(Super COURSE50)• CCUS• 100% hydrogen direct reduction• Large-scale EAFs, etc.

CO2emission
intensity
2020
2020

2030
2030

2040
2040

2050
2050

Source: METI
(https://www.meti.go.jp/policy/energy_environment/global_warming/transition/transition_ﬁnance_technology_roadmap_iron_and_steel_jpn.pdf)
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

4

JFE Steel’s Transition to Low-carbon Processes
Develop ultra-innovativetechnologies for carbon
neutrality

2024
18% less
CO2

Carbonrecycling
blast
furnace

Directreduction

2030(GI Use of funds)

Transition Period
Expand use of DRI

Small-scale
tests

Mid-scaledemonstration tests+CCU

EAF ironsourceCarbonneutrality

Adopt optimal processes
based on external conditions

Develop large-scale furnaces

Use inexisting
blast
furnaces
High-grade
HBI

Innovation Period

30% or more
CO2

Use EAFs

2050

Establish & implement ultrainnovative technologies

Roll out based on hydrogen supply volumeα● LNG injection● HBI● Oxygen blast
furnaces● Low-grade ore● Carbon recycling
technology

×Transition to carbon-free hydrogen
Direct-reduced iron made withβ×blast furnace-grade ore (Fe<65%)

EAF
Use ofscrap
External
conditions• Carbon-freeelectricity• Carbon-freehydrogen• CCUS

Upgrade Sendai
EAF

Large, high-efficiency
EAF (possibly inKurashiki District)

DRP
technology
Double-slag
reﬁning process

Expand use of scrap

γTransition to carbon-free electricity

×

Burnerlesstechnology

Green steel
Sustainable market based on
actual environmental value

Carbon-free electricity Carbon-free hydrogen

CCS

Pursue multilayered technology development, via GI Fund projects, etc., to discover the mostproven technologies and then achieve carbon neutrality by deploying the most optimized
configuration of green steelmaking processes.
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

5

JFE Steel’s Carbon Neutrality Vision 2050
CCS
Store CO2 inslag/concrete

Storage

Reduc,on

CCS

More energy-saving equipment

CO2

CO2

CO2

Carbon-freehydrogenIntelligent
Usage
Deploy more carbon-recycling
technologies in direct-reduc3onsteelmaking

Fuel/oxygen +powdermaterial

Converter
Carbon-freeelectricity

Increased use of scrap(external condi9ons)

CCS

Oxygengas

Introduce EAFs

Energy savings,
etc.

2050

(external condi4ons)

Eﬀec:ve use of
scrap

Carbon-freeelectricity

Carbon neutrality

Breakdown of CO2 reduc?on

Large, highefficiency EAFs

Carbon-recycling blast
furnaces & CCU

CO2 & H2 O

Pellets

Blast furnace gas (CO2 , CO & H2 )O2*Uses circula3ng gas

Methana3on

H2 O

CH4: Carbon-neutral reductant

Hydrogen(indirect hydrogen
injection)

Reduction
furnace

Sha- gas injec3on(SGI)*

More use of CCU at industrial complexes

CCUS

Carbonrecycling

Carbon-recycling direct-reduc4on
Reduc&on furnace gas (CO2 , CO & H2 )CO & H2

Circulates

Carbon-recycling blast furnace

Coke

Carbon-freehydrogen(external condi4ons)

tary
prie
Pro ology
n
h
tec

DRI
tary
prie yPro nolog
techElectric arc
furnace (EAF)

CO2

Carbonrecycling

CO2 +4H2 =CH4 +2H2 O

CH4

H 2O
out ofsystemMethanation

Hydrogen(indirect hydrogen
injection)

H2 O

CH4: Carbon-neutral reductant
DRI

Blast furnace, EAF & converter

Combine reduction, intelligent usage and CO2 storage
to realize a carbon-neutral steel business by 2050
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

6

Carbon Neutrality Action Plan

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

7

JFEʼs Carbon Neutrality Action Plan
▶ JFE Steel is introducing low-carbon steel processes during its “transition period” to 2030.
▶ In its “innovation period” from 2030 to 2050, JFE Steel aims to develop and implement ultrainnovative technologies for carbon neutrality.

Transition periodlIncreasingly deploy low-carbon technologies
through capital investment to achieve targets

Innovation periodl Swiftly establish and deploy ultra-innovativetechnologies

such as cutting 2013-level CO2 emissions by
30% or more by 2030l

Accelerate multitrack R&D targeting ultra-

l Collaborate with communities and industrial
complexes toward carbon neutrality

innovative technologies for innovation periodl Grow markets for sustainable green steel basedl Create markets for renewable green-steel

materials based on actual environmental valueon actual environmental value→Grow demand leading to virtuous cycles→ Create initial demand
Maintain the competitiveness of Japanese steel
Stimulate demand through government policy

through plentiful, low-cost, stable supplies of carbonfree hydrogen and electricity

Behavior must be shifted on both supply and demand sides to create markets for green steel
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

8

30% Less CO2 Emissions by 2030
• Transition to Low-carbon Processes• Expand Use of Scrap in Converters• Expand Use of Scrap in EAFs
• Produce Direct-reduced Iron

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

9

Transition to Low-carbon Processes▶ Continue to develop ultra-innovative technologies for decarbonized steel processes by 2030
▶ Increasingly use low-carbon technologies to cut CO2 by 30% or more by FY2030
Energy savings andhigh efficiency

Low-carbon feedstock &fuel

Low-carbon processes

Upgrade to high-efficiency cokeovens

Expand use of scrap in converters
Use direct-reduced iron (HBI)

Upgrade existing EAFs

Fukuyama District (2025)

All districts (under way)

Sendai Works (2024)

Securing Scrap and HBI
Reinforcing storage depots

Introduce large, high-efficiency
EAFs

All districts (under way)

Kurashiki District (2027-2030)

Bolster LNG supply network

Use ferro-coke for commercial
production

Improve efficiency of powerdemand facilities(Electrify blast-furnace blowers, raise
efficiency of oxygen plants, etc.)

All districts (under way)

Leverage AI & DS (companywide
CPS, etc.) for energy savings
All districts (under way)

Fukuyama District (TBD)

ü To reduce CO2 emissions by 30% or more by 2030, 1 trillion yen in capital investment will
be needed for low-carbon initiatives (large electric furnaces, ferro coke, scrap andreduced iron, LNG, etc.).
ü A market that reflects the actual environmental value of green steel must be created tosupport capital investment in decarbonization technologies.
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

10

Expand Use of Scrap in Converters▶ Eco-friendly converter-type molten-iron pretreatment process (DRP®) deployed companywide
as of 2021, helping to cut CO2 emissions by some 170,000 tons in FY2021▶ Develop technology to increase heating margins to enable expanded scrape use and invest in
facility expansions to reduce CO2 by some 2 millions tons/year by FY2030.
Eco-friendly Double-slag Refining Process (DRP®)
Generated SiO2 discharged
from furnace reduces needto bring in SiO2, resul<ng in
more eﬃcientdephosphoriza<on

100

Blast
furnace

High-Si irondesiliconizationfrom molten ironIntermediate dephosphorization
deslagging
from molten ironmain raw material (%)

Scrap

DRP® for More Scrap Use

10%
90

80

Heat from burning Si in
molten iron* enables
increased use of scrap

18%

Scrap

90%
82%
Molteniron*Normally, molten iron is70

desiliconized before charging into
converter with no intermediate
deslagging.

Tapping

Decarbonization(dedicated furnace)conventional

DRP®

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

11

Expand Use of Scrap in EAFs (1)▶ Upgrade Sendai Works’ existing EAF to reduce CO2 emissions by 30% or more by 2030
▶ Consider introducing large, high-efficiency EAF at West Japan Works’ Kurashiki District

Fukuyama

Kurashiki

Sendai Works

Reduce blast
furnaces from 3
to 2 and add EAF

3 blastfurnaces

Upgrade EAF

Bars & rods

SheetsPlatesSheetsPlatesCan steel

ShapesElectrical
sheetsShapesUOE pipe

Semi-finishedproducts

Bars & rods

Semi-finishedproducts

East Japan Works
KeihinWest Japan Works

Chiba

Remove blast
furnace(as previously disclosed)
PlatesChita Works

Electrical-resistancewelded pipe

Seamless pipe

SheetsIron
powders

Electrical-resistance weldedand butt-welded pipe

Stainless steel

Sheets (pickled &specialty)

Spiral steel pipe

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

12

Expand Use of Scrap in EAFs
Upgrade Sendai EAF▶ Use DX and other means, including upgradedcargo-handling equipment, to raise production
capacity to 140,000 tons/year by 2024

Build large, high-efficiency EAF▶ Possibly introduce large, high-efficiency EAF•

Concurrently shut down one blast furnaceslated for refurbishing (between 2027 and2030) in Kurashiki District•

Enhance steel production efficiency andquality by developing technology at GI
Fund’s test-EAF in Chiba District, combinedwith JFE’s own EAF technology

CO2 reduction target:
100,000 tons/year▶ Improve EAF material quality by developing
technology to reduce impact of tramp elements(Cu, etc.) in existing materials→ Raise eco-friendly product sales capacity tomeet customer needs

Technology for developing
large EAFs
• Reduce electricity through high-ü Optimize steel composition:
Create ideal balance ofelements to achieve mechanicalproperties and workability
equivalent to blast furnace steelü Heating/rolling technology
development: Optimize
conditions for suppressing
surface defects caused by grainboundary infiltration of Cu in
scrap during heating

Electrode
Burnerefficiency preheating technology(for cold iron sources) andburner-based heating• Utilize technology for highefficiency adding/melting of large
amounts of direct-reduced iron,combined with molten steel

Scalingagitation technology

Base steel

CO2 reduction target:
3 millions tons/year

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

13

Direct-reduced Iron Feasibility Studies▶ In the transition period until 2030, the production of high-quality steel in electric arc
furnaces will require high-grade direct-reduced iron, but supplies are limited.
▶ JFE Steel, Emirates Steel (UAE) and ITOCHU have agreed to conduct detailed feasibility
studies aimed at building a supply chain for ferrous material.
▶ Aim is to construct a reduction furnace with an output capacity of 2.5 million tons per year,with some of the direct-reduced iron going to JFE Steel.
コアメンバーで、グリーン・サプライチェーン構築に
コアメンバーで、グリーン・サプライチェーン構築にPartners conduct detailed feasibility
コアメンバーで、グリーン・サプライチェーン構築に向けた詳細な事業化調査を共同推進

コアメンバーで、グリーン・サプライチェーン構築に向けた詳細な事業化調査を共同推進

studies aimed at building a supply chain
向けた詳細な事業化調査を共同推進of向けた詳細な事業化調査を共同推進
the Ferrous Material

cao)
イヤー

Supplierof Mineracao)(CSN

JFE Steel and

⾼品位鉱サプライヤー
high-gradeironother steel(CSN Mineracao)ore
⾼品位鉱サプライヤー

companies(CSN Mineracao)
⾼品位鉱サプライヤー

コークスから天然ガスへ還元剤を置換した直接還元鉄とコークスから天然ガスへ還元剤を置換した直接還元鉄とReduce CO2 emissions by using natural gas
CCUSの活⽤でCO2排出量を削減︕︕︕
High-grade iron ore

CCUSの活⽤でCO2排出量を削減︕︕︕
insteadof coke as the reductant, and CCUS
solutions, incl. enhanced oil recovery (EOR)

Ferrous Raw Material forGreen Ironmaking with Lowcarbon Emission

コークスから天然ガスへ還元剤を置換した直接還元鉄とCopyright © 2022 JFE Steel Corporation. All Rights Reserved.

14

Multitrack R&D Targeting
Ultra-Innovative Technologies• Challenges in Developing CO2 Reduction for Steelmaking• Development Project Supported by Green Innovation Fund
• Overall Scale of GI Fund Projects• GI Fund Project for Reducing CO2 via CR Blast Furnaces• GI Fund Project for Direct Hydrogen Reduction• GI Fund Project for Large, High-efficiency EAFs

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

15

Challenges in Developing CO2 Reduction for Steelmaking
Challenge 1: Supplying heat duringhydrogen reduction

Sintered ore
Fe2O3

Fe2O3

H2O

H

Fe2O3

Coke C

Endothermic

Heated air
O2(Used forheating &power
generation)

Middle中東

Africa
アフリカ

アジア
Asia

Europe欧州

北⽶
America 南⽶
America

North

South

East

Russiaロシア

80
Source: “Steel Statistical Yearbook,” 2019,
Worldsteel

60
40

10 million tons
(approx. 10% of production)

20
0

By-product gas

N2 H2O CO2
CO H2

Blast
furnaceFe

110 million tons

100

Pellets(Used for heating &power generation)

By-productgas

Pulverizedcoal
Natural gas

120

Fe

Exothermic2

Global production & trade of direct-reduced iron

Productionand exports(M tons/year)

Hydrogenreduction

CO2

C

NaturalGas
Reduction
furnaceElectric
Reduced Melting furnaceiron▶ Steelmaking requires a reducing reaction thatremoves oxygen from the iron ore.
▶ Hydrogen reduction is endothermic, so heatmust be supplied to both blast furnaces andreduction furnaces

High-grade ore supply
Fe Concentration (%)

Carbonreduction

Challenge 2: Securing cold iron sources

70

＞67%
67-65%

65

65-62%

Iron ore on seaborne trade basis(1.5 billion tons/year)

62-58%

60

<58%

55
0

20

40

Source: Primetals Technologies, Inc. (amended)

60

80

100
Ratio(%)▶ About 100 million tons of high-grade directreduced iron is required to produce high-quality
steel in electric arc furnaces▶ Raw materials are currently limited to high-grade
raw materials, so technologies for using lowgrade raw materials are needed.
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

16

Challenges in Developing CO2 Reduction for Steelmaking

Challenge 3: Impurities in scrap

copper, tin, etc.

Scrap

slag

DRI

Challenge 4: Productivity of electric
furnaces
Productivity

30% less
productivity
500t/unit
Per hour360t/unit
per hour(world’s largest)

Electric
furnace

Blast furnaceand converter

Electric
furnace

Source: Jumbo size 420t twin DC FastArc®EAF, Millennium
Steel, 2011

▶ Scrap contains impurities, such as copper andtin, while direct-reduced iron contains impurities
such as slag
▶ Efficient production of high-quality steel fromiron with many impurities is difficult.

▶ Electric melting from cold iron sources such as
scrap is significantly less productive thanconverter furnaces.
▶ Using direct-reduced iron lowers productivity andincreases electricity consumption.

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

17

Development Project Supported by Green Innovation Fund
▶ This project, targeted at using hydrogen in ironmaking and commissioned and subsidized by NEDO*,
was selected in December 2021 to receive support from the Green Innovation Fund.
▶ The fund is helping to accelerate the development of technologies for achieving carbon neutrality.
▶ Formed a consortium with three steel companies and JRCM** and held the first meeting of theHydrogen Iron and Steel Committee in June 2022.
*New Energy and Industrial Technology Development Organization

Carbon-recycling blast furnace

By-product gas(use on-site, circulate
through reduction furnace,
etc.)
H2

Coke C

CO2
Carbonrecycling

Large, high-efficiency EAF
Electrode
(-)

H2
H2
Methanation facility
Methane CH4 (CNreductant)
O2

Build a small test blast furnace(150m3) in Chiba District
Prefecture to develop a process
for converting CO2 by-productinto methane for reuse as a
reductant, aiming to cut CO2
emissions by 50% or more.

BurnerPreheating of
reduced iron

Cold iron source
preheated byexhaust gas

CCUS
Generateelectricity
orCarbon-freeelectricity

Reduction
furnaceBlast
furnace

Development
project

Direct-reduction steelmaking
Low-grade iron ore

Sintered ore
Fe2O3

Summary**Japan Research and Development Center for Metals

Slag

Melting

DRI

EAF

Build a small test reduction furnace in
Chiba District Prefecture to develop a
direct-reduction ironmaking process
for reduced iron that uses hydrogen to
remove oxygen from low-grade ironore, aiming to cut CO2 emissions by
50% or more vs. blast furnaces.

Molten steel
agitation coil

Moltensteel
Bottom electrode(+)

Build a small test EAF in Chiba
District Prefecture to develop a highquality steel manufacturing method
incorporating high-efficiency meltingof scrap and reduced iron, reductionof impurities, etc.

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

18

Overall Scale of GI Fund Projects▶ Development toward Stage Gate Reviews scheduled mainly in FY2025–2026▶ Studies also underway with a view to actual implementation in 2030–2040s
Medium-scale
tests

Develop technologies & conduct
small-scale tests

2021〜2025

2026〜2030

Large/full-scale
tests

2031〜2040★ Stage Gate
2041〜2050

R&D Project 1: Develop hydrogen-reduction technology for blast furnaces(1) Develop hydrogen reduction
Use test blast furnacetechnology, etc., using on-site
Modify actual furnace
Designhydrogen★

(2) Develop low-carbon technology,
etc., using external hydrogen
Designand CO2 in blast furnace& build
exhaust gas★Implement

Test in actual furnace

Develop technologies
Use small test blast furnace
DesignCarbon-recycling blast furnace

Midsize test blast furnace

actual★ Build
furnaceSuper-COURSE50

Testing

Testing(Phase 1)(Phase2)

Testing in
actual furnace★Implement

R&D Project 2: Develop direct hydrogen reduction technology for reducing low-grade iron ore using only hydrogen
Develop technologies(1) Develop direct hydrogen
reduction technology

Design & build Use small test blast furnace

Carbon-recycling direct reduction steelmaking

DesignHydrogen reduction steelmaking(2) Develop technology forremoving impurities in EAFs
using DRI

Midsize direct reduction furnace

actual★ Build
furnace

Testing

Testing(Phase 1)(Phase 2)★Implement

Develop technologies
Large test EAF

Design & build Use small test blast furnace

High efficiency and high quality in large EAF

Design★

Test in actual
furnace

Test in actual
Testing
furnace(Phase 1)

Source: METI
（https://www.meti.go.jp/policy/energy_environment/global_warming/gifund/pdf/gif_05_randd.pdf）(Phase 2)★Implement
Note: All schedules are projec<ons

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

19

GI Fund Project for Reducing CO2 via CR Blast Furnaces▶Build small carbon-recycling test blast furnace (150m3) in East Japan Works’ Chiba District▶Conduct trial operation to verify basic principles (Apr. 2025 – FY2026)▶Conduct demonstration tests, aiming to reduce CO2 emissions by 50% or more vs.
conventional blast furnaces
Carbon-recycling blast
furnaceConventional
blast furnace

Iron ore

Coke

Iron oreBlast
furnace gas

Coke

Convert CO2 to methane using H2 for reuse as carbon-neutral
methane, instead of coke, as the reductant.

Blast furnace gases:

Effective utilization
through CCUS

CO2, CO , H2

Shaft gas
injection (SGI)
Heated air

Pulverizedcoal(uses gas
circulating
through thesystem)Methanation

Carbonrecycling

H2
CO2 + 4H2

O2

CH4 + 2H2O

CH4Carbon-neutral reductant

H2 O

Path to implementation*: By 2030, conduct medium-scale blast furnace demonstration tests (up to
700m3 in Kurashiki District ) using pure oxygen & medium-pressure (“city”) gas, and then consider
conducting demonstration tests, or actual implementation, of a full-scale furnace at an early stage*Post-stage gate plans TBD

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

20

GI Fund Project for Direct Hydrogen Reduction▶Build a small bench-test furnace in East Japan Works’ Chiba District and start testing in 2024.
▶JFE Steel will handle direct carbon recycling (indirect hydrogen injection), which utilizes
methanation, traps carbon in the process for recirculation, and overcomes heat absorption inhydrogen reduction.
Conventional
reduced ironHighgradepellets

Carbon-recycling direct reduction

CO2 , H2O

CO , H2

Out ofsystemLowgradepellets

H2O out of system

CO2 , H2O

CO2CO , H2

Methanation

Circulates
Circulates

Reduction
furnaceNatural gas

(CH４)

DRI

• CO2 in exhaust gas converted
into methane and sent io reduction
furnace• Only water is discharged

Carbonrecycling

Reduction
furnace

CO2+4H2=
CH4+2H2O

Only hydrogen supplied(indirect hydrogen
injection)

CH4

Carbon-neutral reductant

H2O

DRI
Path to implementation*: Conduct technology validation at a larger plant and then consider
conducting demonstration tests, or actual implementation, of a full-scale furnace at an early stage.
*Post-stage gate plans TBD

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

21

GI Fund Project for Large, High-efficiency EAFs
▶ Build a small test EAF (10 tons) in the East Japan Works’ Chiba District and start testing in FY2024.
▶ Combine reduced-iron-preheating, heating-burner and molten-steel-agitation technologies in aprocess aimed at reducing EAF-melting power consumption and enabling high-speed melting ofcold iron sources (scrap & reduced iron).

Large, high-efficiency andhigh-quality EAF

BurnerElectrode(-)

Reducedironpreheating
Preheating reduction charging port

Shaft
Powder-heating burner
Heating powder (refining agent &carbon material) with a burner
while adding it to the furnace
results in highly efficient heating.

Note: JFE Steel also built a 3-ton
smelting furnace in Fukuyama
District to develop a high-quality
steel production method using
scrap and reduced iron in an
EAF.

Cold iron source
preheated byexhaust gas

Slag
Bottomelectrode (+)

Molten steel

Molten steel
stirring coil

Path to implementation*: Deploy technology from above GI Fund Project to construction JFE Steel’s EAF*Post-stage gate plans TBD

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

22

Initiatives for Effective Use of CO2• CCUS and Green Infrastructure Initiatives• Port Initiatives Carbon Neutral• CO2-based Methanol Synthesis• Storing CO2 in Steel Slag

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

23

CCUS and Green Infrastructure Initiatives▶ In addition to CCU-synthesis and CO2-fixation technologies, large-scale CO2 capture, utilization andstorage (CCUS) solutions will be needed to achieve carbon neutrality by 2050, based on which necessary
partnerships are beginning to be formed.
▶ Building a carbon-recycling society in which CO2 is used as a new carbon resource will require major
infrastructure construction and enhancement to supply huge amounts of hydrogen and carbon-freeelectricity. Institutions and societal support for accelerating private-sector collaboration also will be needed.
MCH,
liquidhydrogen &ammonia

Carbon-freeelectricity

Hydrogen highway
Industrial
complexes

CR blast
furnace

Blast furnace gases:（CO2 CO H2 ）CokeChemicalproducts
Synthetic
fuels

Downstream
process

Carbonrecycling
Blast
furnace

Synthetic
methanePetrochemicals

Immobilization
Slag andConcrete

CCUS

Shaft gas
injection
(SGI)

CCU
Methanol,etc.

O2

Methanation

H2 O

H2O

Coal

Carbon-neutral reductant: CH4

Undergroundstorage

CO2

CO2

CO2

CO2

By-product energy

Plastic products

Steel works
Used plastic※CCUS︓Carbon dioxide Capture, Utilization and Storage
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

24Initiatives for Carbon-neutral Ports▶ The ports of Kawasaki and Yokohama, which include the Keihin District of the JFE Steel’s East Japan
Works, are jointly implementing carbon-neutral port measures under a government-private sector
initiative.
▶ ENEOS, JERA and JFE Holdings are studying a possible collaboration to establish a base for receiving
and supplying hydrogen, ammonia, etc., in view of JFE’s changing use of deep-water wharves andadjacent land due to structural reforms.
Carbon-neutral Ports

Facilities in Ohgishima (site of JFE Steel’s Keihin
District) for receiving and supplying hydrogen, etc.
（⽻⽥空港・東京⽅⾯）(Haneda Airport in Tokyo)

Hydrogen supply
network

岸壁

⽔素Hyd
基r地
ogen
whar

(Industrial complex in
Yokohama)
Source: Ministry of Land, Infrastructure, Transport and Tourism’s Carbon Neutral Port
Formation Planning Manual (https://www.mlit.go.jp/kowan/content/001447257.pdf）

Ohgishimafacarrie nd othe
r
rs

Hydr
og
statio ennl Receive and supply hydrogen, fuel ammonia, etc. fromoverseasl Help to decarbonize port logistics
l Help to decarbonize nearby companies

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

25

CO2-based Methanol Synthesis▶ Construction of test facility in West Japan Works’ Fukuyama District to start in FY2022.
▶ Startup expected in FY2023 and practical application testing to finish in FY2025.
▶ The aim is to build an optimal system based on low-cost CO2 separation and high-efficiency
methanol synthesis.
Note: This initiative has been commissioned by the New Energy and Industrial Technology Development Organization (NEDO) under aproject named “Development of Technology for Carbon Recycling: Next-generation Coal-fired Power Generation and Development ofTechnology for Reducing CO2 Emissions and the Practical Application of Effective Uses for CO2.”

Joint R&D undertaking with Research Instituteof Innovative Technology for the Earth:High-eﬃciency methanol
synthesis reactor

Low-cost
CO2 separation
PSA

Reac3on eﬃciency >60%**20-30% with conventional methods

H2

CO2 separation PSA (ASCOA-3)

CO2
separation
PSA(CO2, CO , H2)
Exhaust gas

Preprocessing
equipment

CO

CO2

Reactor

H2

Unreacted gas
recycling

Recycling of water produced in reaction

N2

MethanolTargeting CO2 reduction of several mil. tons/year**Assumes use of petroleum-derived chemicals as alternative base materials
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

26

Storing CO2 in Steel Slag
▶ Practical application test facility to be built in East Japan Works’ Chiba District from FY2023.
▶ Process principles to be verified by FY2022 and operation to be tested between FY2024
and FY2025.
▶ Verify technology for storing CO2 in slag, heat recovery technology for high-temperatureslag, and technology for using slag in road construction.
Note: This initiative has been commissioned by the New Energy and Industrial Technology Development Organization (NEDO) under aproject named “Development of Technology for Carbon Recycling: Next-generation Coal-fired Power Generation and Development ofTechnology for Reducing CO2 Emissions and the Practical Application of Effective Uses for CO2.”

Solidification in amodel experiment

Joint R&D effort with Ehime University:

Rapid, high-volume
CO2 storage andheat recovery

Hot crushing

Carbonation

CO2

Solidification of molten
steelmaking slag

Steel slag for road
construction
Targeting CO2 reduction of300-350k tons/year
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

27Collaborating with Society on
Carbon Neutrality• Stimulating Demand for Green Steel• Initiatives for Collaborating with Society• New Teams Overseeing Carbon-neutrality

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

28

Stimulating Demand for Green Steel▶ In the EU, green steel is branded and sold using a mass balance approach.
▶ Achieving 30% CO2 reduction by FY2030 will enable JFE Steel to supply up to 5M tons ofgreen steel per year using the same approach.
▶ To create a carbon-neutral world, government policies need to encourage behavioral
changes in both the supply and demand sides in order to drive changes in society andspark innovation for new industrial competitiveness.

Supply side

Demand side●

Huge capital investment is needed to introduce lowcarbon & ultra-innovative technologies. (1 trillion yen
in low-carbon investments by 2030)●

Green steel products do not directly benefit
consumers in terms of better quality, performance,
convenience, etc.

●

While JFE Steel will strive to minimize R&D cost
increases, some increase will be inevitable in theeffort to create new environmental value.

●

Ethical consumption appears to be on the rise, but inJapan awareness of environmental value is low.

●

Incentives are needed to encourage the recognitionof environmental value and the purchase of productsthat significantly reduce carbon.

●

Prospects for appropriate returns on suchinvestments also will be needed.

To support investment in low-carbon technology during the transition period until 2030 and toprepare for further large-scale investment during the innovation period, a green steel market must
be created at an early stage (transition period) and government policies must raise the public’s
awareness as well as encourage steel consumers to change their behavior.
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

29

Initiatives for Collaborating with Society••

Realizing carbon-neutral steelmaking is a top priority for JFE Steel, but generating
environmental value will involve large cost increases, so there are limits on what a single
company can do.
Mechanisms are needed so that society, as the beneficiary of green steel, helps to cover the
associated cost increases through government support, collaborative initiatives, etc.

Huge R&D and facility installation costs● Achieving CN by 2050 will be a major technological challenge requiring huge R&D outlays.
● Transitioning steelworks to carbon-neutral processes will require even greater capital investment.
● Long-term government support will be needed to shoulder the financial costs of achieving carbon neutrality.

Deliver environmental value and create markets during transition● Government support is needed for capital investment in low-carbon technologies by 2030
● A mechanism is needed to create a market where costs commensurate with green steel’s environmental value canbe shared with customers and society

Develop infrastructure for carbon-neutral steelmaking and fuel inter-company collaboration● Develop infrastructure for the low-cost, stable, large-scale supply of carbon-free hydrogen and electricity needed
for carbon-neutral steelmaking● Develop an execution platform for CCUS and green infrastructure implementation through collaboration withindustrial complexes, corporations, etc.

Economic policies targeting green-transformation investment and international competitiveness● Ensure international competitiveness of industrial electricity prices● Introduce tax system that encourages implementation of ultra-innovative technologies, such as the abolition ofdepreciable asset taxation and the avoidance of a carbon tax before the establishment of decarbonizing technologies● Carbon Border Adjustment Measure (CBAM) should be consistent with WTO rules. Ensure a level playing field incooperation with other countries
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

30

New Teams Overseeing Carbon Neutrality Promotion▶ Establish new teams to oversee the achievement of carbon neutrality by 2050
ü CCUS and Green Infrastructure Study TeamIn addition to existing R&D, this team will oversee studies on CO2 capture, utilization and storage
technologies and the procurement of carbon-free hydrogen and electricity, including related
collaboration with industrial complexes and other private companies.
ü Green Steel Strategy Study TeamIn addition to dealing with issues such as standardization and market strategy regarding green
steel products, this team will develop strategies for new businesses, including solutions thatleverage patents and rights to carbon-neutral process technologies.
Board ofDirectors

Management
Committee

Carbon Neutral Advancement Committee: Management Committee Members and Projects
Carbon neutral advancement project teamProject leader: Vice president in charge of Corporate Planning Department
Head office:Carbon Recycling Development
Dept.
(est. July 1, 2021)

Raw Materials Dept, Green Raw
Materials Section(est. July 1, 2021)

Advanced Melting Process
Development Dept.
(est. Oct. 1, 2021)

Advanced Reduction Process
Development Dept.
(est. Jan. 1, 2022)

CCUS & Green Infrastructure Study Team
(est. Aug. 1, 2022)

Corp. Planning
Dept.

Facilities
Planning Dept.

Each Technology Dept.
Technology
Planning Dept.

Green Steel Strategy Study Team
(est. Sep. 1, 2022)

Sales Coordination &Operation Planning
Dept.

Steel researchlaboratories:
Specialist teams

Sectors & Centers

Steel works and manufacturing sites
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

31This material is not disclosure material under the Financial Instruments and Exchange Act and does not guarantee theaccuracy or completeness of its information. In addition, the projections and other information presented are based on
information available at the time of the presentation and include 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 © 2022 JFE Steel Corporation. All Rights Reserved.

32