Canada’s green iron potential – a strategic opportunity for Japan and Nippon Steel

The Hague, 15 May 2025 – Canada’s massive potential to be a world’s leading producer and exporter of green iron is revealed today, highlighting opportunities for Japan and Japanese steelmakers, including Nippon Steel, according to a new research by Lund University, commissioned by SteelWatch. [1]

With high-quality iron ore reserves, strong renewable energy potential, good infrastructure, a skilled workforce and firm political commitment to net-zero by 2050, Canada has the key ingredients to become a decisive force in global steel decarbonisation, the research highlights

Japan, as the third largest global importer of Canadian iron ore, imports USD 778 million (JPY 113 billion) worth of iron ore from Canada [2]. Japan has the opportunity to leverage off long-standing and well-established trade partnership and to spur demand for Canadian green iron. This potential green iron trade can contribute to shifting  Japan’s steel production away from coal-based blast furnaces.

Nippon Steel has a particularly unique opportunity here, having recently acquired a 30% stake in Champion Iron’s Kami iron ore project in Canada [3]. This project could produce nine million tonnes of high-grade iron ore, suitable for near-zero emissions virgin iron production each year [4]. With Canada holding the key ingredients for such production, there is potential for Nippon Steel to explore partnering in near-zero emissions virgin iron production in Canada, giving it an advantage in accelerating decarbonisation. Yet the company has not indicated any plan so far [5].

“The research shows that Canada not only has a potential for green iron production but can produce it at  a globally competitive price. Estimated production costs sit between USD 430–520 (JPY 63,700 – 77,000) per tonne  [6] , right at the bottom of the global range, placing Canada among the most competitive global producers of green iron. It would be a promising option for Japan to advance its green economy,” said one of the report’s authors, Chris Bataille, Canadian researcher and founding partner of the Center on Global Energy Policy at Columbia University.

“Investing in Canadian near-zero emissions  iron could be a win-win opportunity for Japanese steelmakers. Securing quality green iron supplies like Canada’s would help Nippon Steel speed up the necessary transformation of its business, and help the company end its misguided focus on coal-based production,” said Roger Smith, Asia Lead, SteelWatch. “Japan and Canada have a secure, nearly 100 year old bilateral relationship, and with Nippon Steel’s existing investments in the region the company is uniquely positioned to secure a huge competitive advantage in the looming green economy.”

Recently, SteelWatch has shown the green iron trade as one of the promising solutions for green steelmaking. [7] This innovative strategy of separating the ironmaking process from the steelmaking process is attracting attention of  the steel sector. 

ENDS

Contact:

Roger Smith, SteelWatch Asia Lead [email protected]
Mikiko Ishii, Japan Campaign Officer [email protected], +81 90 8381 4328

Notes:

1. Jonas Algers & Dr. Chris Bataille, Strategic decarbonisation of the Canada iron and steel industry: A worker-centered path to cut emissions, increase value added and strengthen global supply chains, Lund University, 14 May 2025. https://portal.research.lu.se/en/publications/strategic-decarbonisation-of-the-canadian-iron-and-steel-industry
   JP Executive Summary is available on SW website, https://steelwatch.org/wp-content/uploads/2025/05/JP_Summary_CanadaDecarbobisation.pdf
2. Ibid. P.24
3. Nippon Steel, Acquisition of Interests in the Kami Iron Ore Project in Canada and Master Agreement on Joint Venture Establishment, 19 December 2024.  https://www.nipponsteel.com/common/secure/en/news/20241219_100.pdf
4. Currently H2-DRI (direct reduction of iron oxides with green hydrogen) is the available near-zero emissions virgin iron technology and the product of this method is referred as ‘green iron’, technically called near-zero-emissions DR iron. For details, read SteelWatch Explainer: Why green iron trade will catalyse steel industry decarbonisation. https://steelwatch.org/steelwatch-explainers/steelwatch-explainer-why-green-iron-trade-will-catalyse-steel-industry-decarbonisation/
5.  SteelWatch, No Time For Caution: Nippon Steel Corporate Climate Assessment 2025 Update, P.19, May 2025 .https://steelwatch.org/wp-content/uploads/2025/05/250507_NS_CCA_EN.pdf
6. Jonas Algers & Dr. Chris Bataille, Strategic decarbonisation of the Canada iron and steel industry: A worker-centered path to cut emissions, increase value added and strengthen global supply chains, Lund University, P.31, 14 May 2025.  https://portal.research.lu.se/en/publications/strategic-decarbonisation-of-the-canadian-iron-and-steel-industry
7. SteelWatch, SteelWatch Explainer: Why green iron trade will catalyse steel industry decarbonisation, 23 April, 2025. https://steelwatch.org/steelwatch-explainers/steelwatch-explainer-why-green-iron-trade-will-catalyse-steel-industry-decarbonisation/

For all media queries, please contact [email protected]