Japan’s JFE Steel’s EAF construction project receives state support

Investments in the project are estimated at $2.1 billion

Japanese steelmaker JFE Steel’s project to build an electric arc furnace (EAF) at its West Japan Works plant in Kurashiki has received government support. This is reported by Kallanish.

The JFE project, with investments estimated at ¥329.4 billion ($2.1 billion), will receive government funding of up to ¥104.5 billion.

The new EAF, which is being built, will use the company’s proprietary technologies and innovative processes, including high-quality and highly efficient smelting technology developed under the GI Fund project and low-carbon direct reduced iron).

The electric arc furnace complex with a capacity of approximately 2 million tons per year will enable large-scale production of high-quality products, including electrical steel and high-strength plates. The company expects the EAF to be commissioned during the 2027/2028 financial year (starting April 1, 2027).

The project was selected as part of a program to support the transformation of energy and production processes for industries that are difficult to decarbonize. The initiative, supported by GX Economy Transition Bonds, aims to facilitate the transition to carbon-neutral industrial processes.

In the fall of this year, two of the largest integrated steel producers in Japan, Nippon Steel and JFE Steel, applied for government funding provided through the new Green Transformation Promotion (GX) Law to advance research and development in decarbonizing operations.

The Japanese government is providing budget support to companies in four targeted sectors (iron and steel, chemicals, pulp and paper, and cement) starting in the current fiscal year 2024/2025, totaling about ¥484 billion ($3.18 billion) over five years.