Renewable Energy Institute has published a new report, “Green Iron Trade: Unlocking Opportunities for Japan” developed in collaboration with the German think tank Agora Industry.
Steel production accounts for 7–9% of global greenhouse gas emissions, and introducing hydrogen-based direct reduction of iron ore is essential for the industry’s decarbonization. Japan’s steel sector roadmap also envisions the deployment of this technology by the 2040s. Compared to the conventional blast furnace route, hydrogen-based direct reduction can significantly cut CO₂ emissions.
In Japan, however, hydrogen production is costly, and importing hydrogen presents significant challenges. As a result, a strategy is being explored to decouple the hydrogen direct reduction process from subsequent steelmaking. Countries with abundant renewable energy and iron ore resources can produce direct reduced iron (DRI) and convert it into hot-briquetted iron (HBI), a compressed and solidified form suitable for global transport.
Meanwhile, countries with high energy costs, such as Japan, can import low-emission HBI for their domestic steel production. This approach is expected to support the creation of an international green iron supply chain and contribute to global steel sector decarbonization.
Direct reduced iron (DRI) projects are already emerging around the world. In Japan, securing a stable supply of DRI will be essential by the early 2030s, when the currently planned “innovative electric arc furnaces” are expected to begin operation. Contributing to the development of an international green iron supply chain will strengthen the competitiveness of Japan’s steel industry and accelerate decarbonization in the country’s largest greenhouse gas–emitting sector, supporting progress toward achieving national climate goals.
This project was jointly conducted by think tank partners of Agora Industry: “E+” in Brazil, “Southern Transitions” in South Africa, “NEXT Group” in South Korea, “Agora China” in China, and the Renewable Energy Institute in Japan. Please refer to the links below for each country’s study*.
European Union Brazil South Africa
*The country reports for South Korea and China will be released in the near future.
<Related Links>
The role of green iron trade in accelerating competitive steel transformation, Agora Industry (17 September 2025)
