Nippon Steel’s coal promise will lock U.S. Steel into decades of high emissions if bid succeeds
Tokyo, Japan, 29 August 2024 – International climate organisation SteelWatch reacts to the announcement of Nippon Steel’s intention to make additional investments in coal-based steel production at the U.S. Steel Gary and Mon Valley sites, in a desperate and dangerous attempt to secure its acquisition (1).
“In a carbon-constrained world, it’s baffling that Nippon Steel thinks that it can seal a critical deal by promising more coal-based production. The race to decarbonise the steel industry is intensifying in the US, and it’s critical that Nippon Steel demonstrates it is ready to shift its business strategy to one that is coal-free. This announcement shows that it is planning to lock in high-emission steel production for decades if its acquisition of U.S. Steel is successful,” said Caroline Ashley, SteelWatch Director.
“Nippon Steel’s blast furnace decarbonisation technology is, at best, a boondoggle that will only marginally and eventually reduce emissions. For steel to be decarbonised on a 1.5C pathway every company has to be retiring blast furnaces, not extending their lives. Decision makers in the U.S. now have a very clear sign that Nippon Steel’s strategy is unfit to meet the task of bringing both Japanese and American steelmaking into the 21st century.”
Gary Works Blast Furnace 14 has a capacity of around 2.5 Mtpa. With a 90 percent utilisation rate and 20 year life extension, it would produce more than 100 MtCO2 of cumulative CO2 emissions over the lifetime of the new blast furnace, according to SteelWatch calculations (2).
In its assessment of the company published in May, SteelWatch observed that Nippon Steel was doubling down on its addiction to coal (3). Last week, the company announced the purchase of a 20 percent stake in Whitehaven’s Blackwater coal mine in Queensland, Australia (4). Today’s conditional announcement of a $300 million investment in extending the lifetime of blast furnace #14 at Gary Works by up to 20 years demonstrates that Nippon Steel is further digging itself into coal, endangering the global climate as well as the company’s own future given the risk of stranded assets. Even coal-heavy rivals like Cleveland Cliffs are investing in new hydrogen-ready ironmaking production with support from the US government (5).
Ends
Contacts:
Shiori Matsumoto, Communications, SteelWatch (Japan)
[email protected] +81 70 8411 0256
Roger Smith, Asia Lead, SteelWatch (Japan)
[email protected]
Jeané Meyer
Communications, Steelwatch (South Africa GMT+2)
[email protected], +27 664 746 830
Notes:
- The investments announced by Nippon Steel today include, for the Mon Valley Works, “no less than $1 billion to enhance the competitiveness” of the plant through various upgrades which will “strengthen the competitive positioning of Mon Valley’ s blast furnace operations”. In addition, Nippon Steel intends to “revamp” Blast Furnace #14 at Gary Works for approximately $300 million. In the company’s own words, after this relining, “the facility’s operational life is expected to extend by up to 20 years”.
- Based on Global Energy Monitor data and an average carbon intensity of 2.3 tonnes of CO2 / tonne of crude steel, fromWorldsteel https://worldsteel.org/data/world-steel-in-figures-2024/
- SteelWatch, Too Little Too Late: Corporate Climate Assessment of Nippon Steel 2024, 31 May, 2024.
- Press release: “Nippon Steel investment in Blackwater coal mining undermines decarbonisation efforts” August 22, 2024. https://steelwatch.org/press-releases/nippon-steel-investment-in-blackwater-coal-mining-undermines-decarbonisation-efforts/
- Press release: “Cleveland-Cliffs Selected to Receive $575 Million in US Department of Energy Investments for Two Projects to Accelerate Industrial Decarbonization Technologies.” March 25, 2024 https://www.clevelandcliffs.com/news/news-releases/detail/629/cleveland-cliffs-selected-to-receive-575-million-in-us
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