- EAF with production capacity of 1.6 mnt/year to be commissioned in 2030
- EAF will be built at US Steel’s Kosice steelworks, to be renamed NSSK from Oct
Nippon Steel will invest about EUR 900 million ($1.03 billion) to build a 1.6 million tonne (mnt) electric arc furnace (EAF) at its Slovakian steelworks, US Steel Kosice, with the EAF scheduled to start operations in 2030.
The investment is part of Nippon Steel’s efforts to strengthen its European operations and establish a production system combining existing blast furnaces with an EAF to improve long-term competitiveness and supply lower-CO2 steel to the European market. The projects are expected to reduce annual greenhouse gas emissions by approximately 2.96 million tonnes of CO2 equivalent, according to the Slovak government.
The EAF will be built at the Kosice steelworks acquired through Nippon Steel’s purchase of US Steel. US Steel Kosice will become a wholly owned Nippon Steel subsidiary on 1 October and will be renamed Nippon Steel Slovakia, or NSSK.
Slovakia to provide EUR 350 million subsidy
Nippon Steel signed a subsidy agreement with the Slovak government on 15 September. The project, which also includes an oxygen plant, will receive about EUR 350 million ($402 million) in subsidies from the EU Modernisation Fund.
Of the total, EUR 310 million ($356 million) will be allocated to the EAF project, while EUR 40 million ($46 million) will support construction of the oxygen plant. The oxygen plant is scheduled to start operations in 2029 and is expected to improve energy efficiency and help reduce CO2 emissions.
The EAF project had been under consideration at Kosice for some time, but planning accelerated after Nippon Steel acquired US Steel and identified Europe as a priority overseas region under its new medium- to long-term management plan through 2030. Securing government support was a key condition for proceeding with the investment.
EAF to reshape Kosice production mix
The Kosice site currently has three blast furnaces and total crude steel capacity of 4.5 mnt/year, although one blast furnace is idle. The remaining furnaces currently provide most of the site’s steelmaking capacity. Its crude steel production totalled 3.22 mnt in 2025, with finished products primarily being automotive steel sheets.
Nippon Steel said the existing free allocation of emissions allowances under the EU Emissions Trading System (EU-ETS) makes it difficult to operate all three blast furnaces, while the volume of free allowances could decline further from 2030.
Nippon Steel seeks bigger role in Europe
The investment comes as the EU tightens measures aimed at reducing carbon leakage and supporting domestic steel production. The Carbon Border Adjustment Mechanism (CBAM) entered its full implementation phase this year, while the European Parliament on 15 September approved a proposal to broaden the scope of carbon-leakage measures to downstream steel products.
Nippon Steel said imports of steel into Europe have declined, helped by trade measures, increasing the significance of expanding production within the region while pursuing decarbonisation.
The project is also part of a broader effort by Nippon Steel to build a stronger European operating base. Nippon Steel plans to make NSSK the hub for managing its European operations and will send engineers from Japan to improve productivity and quality control at the plant.
The company also plans to bring its European businesses directly under the parent company, with Sanyo Special Steel, the Japanese subsidiary that owns Swedish specialty steelmaker Ovako, scheduled to be absorbed by Nippon Steel in April 2027.
Part of wider overseas expansion strategy
For Nippon Steel, local production of lower-emission automotive sheet could therefore serve two purposes: reducing exposure to Europe’s carbon regime and strengthening access to customers as import barriers rise.
Nippon Steel’s Slovakia investment is part of a wider overseas expansion strategy. The company aims to raise annual crude steel production by 60% to 100 mnt/year over the next decade, with around 20 mnt/year of additional capacity planned across Europe and the US, according to a Nikkei Asia report.
Under its medium- to long-term plan through fiscal 2030, Nippon Steel has earmarked JPY 6 trillion for investment, including JPY 4 trillion for overseas operations. The spending is focused on expanding its presence in the US, India, and Europe.
In the US, Nippon Steel plans to invest $11 billion through 2028 in existing US Steel facilities, alongside plans for a new steelworks. In India, its joint venture with ArcelorMittal is raising capacity at a western Indian steelworks from 9 mnt/year to 15 mnt/year through a new blast furnace, with further production facilities also planned.
Note: This article is published in accordance with a content exchange agreement between Japan Metal Daily and BigMint.
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