Nippon Steel to make EAF investments in Japan

Nippon Steel Corp. (NSC) will receive about $1.75 billion in Japanese government funding to help it expand its recycled-content electric arc furnace (EAF) steelmaking capacity in its home country by 2.9 million tons per year.

NSC has been selected as a 2025-2029 Energy and Manufacturing Process Transformation Support Business tied to Japan’s Green Transformation (GX) Promotion Act.

Via that government program, NSC will receive funding to go toward the construction of a new 2 million-tons-per-year EAF production line in Kyoto, Japan, at its Kyushu Works complex.

Additional funding will help NSC add about 500,000 tons per year of EAF capacity at its Setouchi Works north of Osaka, Japan, while a final batch of funds will help it modify and restart a 400,000 tons per year EAF line at NSC’s Yamaguchi Works in southern Japan.

In addition to the $1.75 billion in government funds, NSC plans to invest $6 billion of its own money into the EAF expansion projects.

The company says the government funding is critical to its decarbonization efforts and calls for government, corporate and institutional support for low-carbon steel.

“While the conversion from the blast furnace steelmaking process to the EAF steelmaking process would work to significantly reduce CO₂, it would require substantial capital investment and lead to considerable increases in production costs, including costs for raw materials and electricity,” NSC says.

“It is therefore necessary for Nippon Steel, as a private enterprise, to ensure predictability of investment recovery to carry out such an investment. In addition to the government-supported business that Nippon Steel was recently selected for, establishing a robust GX steel market in which ‘CO₂ reduction values’ are properly compensated is the most significant challenge in ensuring the predictability of GX investment recovery.”

The NSC investments in Japan occur while the company continues to await United States government approval of its bid to acquire Pittsburgh-based United States Steel Corp.

In late May, President Donald Trump made a social media post indicating he was going to approve the bid, and Sen. David McCormick of Pennsylvania told reporters the federal government would gain a U.S. Steel corporate governance stake in the process.

Several days after that post, the president gave a speech in Pittsburgh referring to "a bright future for U.S. Steel" while also announcing an increase on tariff rates for imported steel and aluminum.

As of this writing, neither NSC, U.S. Steel nor the White House have released any follow-up statements or documentation confirming the finalization of the transaction or any details of how it would be structured.