Information-Package Policies for Decarbonizing Japan’s Steel IndustryCurrent Status and Future Outlook

Renewable Energy Institute released a new Info pack titled “Policies for Decarbonizing Japan’s Steel Industry: Current Status and Future Outlook.”

The iron and steel industry is the largest source of CO₂ emissions in Japan’s industrial sector. Decarbonizing the steel sector is therefore essential for achieving carbon neutrality by 2050.

While the iron and steel has long been regarded as a “hard-to-abate” sector, demonstration projects and commercial-scale investments are advancing around the world, accelerating the shift toward new steelmaking processes.

Strong government support will be critical to this transformation. This includes funding for capital investment, technology development, and commercialization, as well as policies to build markets and demand for low-carbon steel.

The Japanese government has supported research and development to decarbonize the steel industry for many years. The GX Promotion Strategy launched in 2023 has accelerated and expanded policy support across both the supply and demand sides. This includes large-scale support for converting existing production facilities, as well as measures to stimulate demand for low-carbon steel linked to subsidies for clean-energy vehicles.

This Info Pack provides a comprehensive review of the policies introduced to date. It also examines how each policy supports the decarbonization of the steel industry, including from a fiscal perspective.

We hope that this report will stimulate further discussion on what additional policy measures may be needed to sustain progress toward decarbonization.