- Move to help secure stable raw material supply for green steel production
- Govt likely to target over 1 mnt of high-grade scrap supply every year
Japan Metal Daily: The Japanese government will support private companies’ investments in strengthening domestic generation of high-grade steel scrap in order to develop and expand the “green iron (GX steel)” market.
With a view to expanding the production and supply of green iron after FY’28, when JFE Steel and Nippon Steel’s large-scale innovative electric furnaces will begin operation, the government aims to secure a stable supply of high-grade scrap, which is essential for manufacturing high-grade steel. It will set quantitative targets and support corporate capital investment.
Regarding green iron, a growth strategy is being considered within the “Resources, Energy, Security, and GX” field, one of the government’s 17 strategic fields. At the Japan Growth Strategy Council meeting held on 10 March, a draft roadmap for public and private investment in leading fields, including green iron, was presented.
Measures to ensure a stable supply of high-grade scrap are considered to be a major pillar of the “green iron” related measures. This is because, after the large innovative electric furnace begins operation, an annual supply of 3 mnt of green iron is expected, making the stable procurement of raw materials a top priority.
While specific quantitative targets will be finalised in the future, keeping in mind a supply of 3 million tonnes (mnt) of green iron per year, the target is expected to exceed 1 mnt.
One specific measure that has emerged is upgrading low- and medium-grade scrap. Currently, the amount of scrap iron collected domestically is around 30 mnt per year. Low- and medium-grade scrap is said to account for the majority of this. The challenge is how to extract high-grade scrap from this.
Specifically, this is expected to involve the development of advanced sorting equipment technology utilising artificial intelligence (AI) and the introduction of recycling facilities such as large shredders. The government plans to provide financial support for such capital investment. Regarding technology development, some development projects are included in the FY’26 budget proposal, but full-scale support is expected to begin in FY’27 or later.
Direct reduced iron (DRI) procured overseas is also expected to be used as a raw material for green iron produced in large electric furnaces. However, there are concerns that the cost of procuring DRI will rise due to supply constraints and other factors. The Ministry of Economy, Trade and Industry believes that, in terms of securing a stable supply of raw materials, priority should be given to measures to ensure a stable supply of domestically generated iron scrap.
Note: This article has been published in accordance with a content exchange agreement between Japan Metal Daily and BigMint.
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