Renewable Energy Institute released the English version of its info pack titled “Policies for Decarbonizing Japan’s Steel Industry: Current Status and Future Outlook,” following the release of the Japanese version on 16 September 2026.
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 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.
＜Table of Contents＞
1. Introduction
Decarbonization of Japan’s Steel Industry: Current Status and Targets
Technological Pathways for Steel Decarbonization
Policy Framework for Steel Decarbonization
2. Plans, Strategies, and Cross-Cutting Measures
Timeline of Steel Decarbonization Policies
Strategies and Plans for Steel Decarbonization
Green Transformation Emissions Trading System (GX-ETS)
♦Is the GX-ETS Benchmark Effective for the Steel Sector?
3. Supply-Side Policies
Subsidy for Energy / Manufacturing Process Conversion for Hard-to-Abate Industries
♦Large-Scale Subsidies Financed by GX Economy Transition Bonds
Other Financial Support for Capital Investment
Tax Concessions for Promoting Domestic Production in Strategic Areas
The Act on Rationalizing Energy Use and Shifting to Non-fossil Energy:
Non-Fossil Energy Transition Targets, Planning, Reporting, and Evaluation
♦Is the Energy Conservation Act’s Evaluation Framework Effective?
4. Demand-Side Policies
Green Public Procurement under Green Purchasing Act
Subsidies to Promote the Introduction of Clean Energy Vehicles (CEV Subsidies)
♦Has the Additional Subsidy for Low-Carbon Steel Been Effective in Creating Demand?
Building LCA
GX Future League / GX Acceleration Declaration Framework
♦Policies for Steel Decarbonization and GX Steel
♦GX Steel
5. Research and Development Support
Green Innovation (GI) Fund Projects: Hydrogen Utilization in Iron and Steelmaking Processes
♦R&D Support: Expansion of Policy Support for the Steel Sector
6. Other Measures and Developments
Developments Related to Steel Scrap
Support for Hydrogen
Support for CCS
Special Contents Heavy Industry Decarbonization
