Innovation

Specific innovations include:

- Carbon recycling blast furnaces - Recycles CO2 emissions back into the steelmaking process to reduce coke usage. Planning pilot tests in 2025-2026.

- Hydrogen-based steelmaking - Using hydrogen instead of coke for iron ore reduction to eliminate CO2 emissions. Conducting R&D on this technology.

- Expanding electric arc furnaces - Produce steel by melting scrap, emitting less CO2 than traditional blast furnaces. Planning capacity expansions.

- Increased scrap usage in converters - Pre-treating molten iron to allow higher scrap ratios, reducing coke usage and CO2.

Setting a 2050 deadline for carbon-neutral steelmaking at JFE's steel plants across Japan. Executing a transition plan from now until 2030 focused on emissions reductions. Also collaborating with industry groups, government agencies, and academic institutions.

Leveraging innovation programs like Japan's Green Innovation Fund to develop breakthrough decarbonization technologies. Upgrading existing equipment and transitioning processes in the near term to maximize emissions reductions.

Inspiration

Leaders find inspiration in steering their companies toward sustainability for multifaceted reasons. Operating as a sustainability-focused company not only serves as a positive force for society and the environment but also positions the organization as a beacon, setting an example for others to follow. This leadership by example becomes a catalyst, motivating other companies to embrace sustainable practices.

The utilization of scrap material and waste in the production process becomes a strategic move, not just for environmental reasons but also for enhancing productivity, scalability, and ultimately, profitability. By incorporating circular economy principles, where resources are reused and recycled, companies can optimize resource utilization, reduce costs, and contribute to a more sustainable supply chain.

Moreover, clean air and a healthy environment are essential contributions to securing a better future for upcoming generations. Leaders cognizant of their role in shaping the future are inspired by the profound impact their decisions can have on environmental conservation and the well-being of communities.

In essence, the motivation for a leader to champion sustainability encompasses a comprehensive perspective that includes societal responsibility, economic efficiency, and a commitment to fostering a cleaner, healthier planet for future generations. By intertwining these elements, leaders create a narrative that goes beyond immediate gains, echoing a commitment to lasting positive impacts on both business and the world at large.

Overall impact

The overall current and expected future impacts of JFE Group's innovation efforts toward carbon-neutral steelmaking include:

- JFE Group reducing carbon emissions from its steel plants

- Contribution to lowering emissions for the overall Japanese steel industry

Short-Term Effects (by 2030):

- 9% reduction in JFE Steel CO2 emissions from FY2013 levels as of FY2021

- Revised target to reduce JFE Steel emissions by over 30% by FY2030 (vs FY2013)

- Expanded use of electric arc furnaces and scrap steel leading to 0.17 million tonnes/year CO2 reduction as of FY2021, projected further reductions by FY2030

Long-Term Effects (by 2050):

- Goal to achieve carbon neutrality in the steel business by 2050

- Carbon recycling blast furnaces projected to reduce CO2 by over 50% vs current blast furnaces

- Significant industry-wide CO2 reductions in steel production expected from new technologies

Evidence:

- Internal company data & targets showing historical emissions reductions

- Projections on emission reductions from increasing scrap usage and implementing future innovations

- Alignment with Japanese national goals & industry alliance targets for deep decarbonization

Innovation taking place over the 2020-2050 timeframe, implemented across JFE's steel plants in Japan, with widespread impact across the domestic steel industry.

JFE's ambitious technology innovation agenda aims to transform steel manufacturing over the next few decades, delivering major near-term incremental emissions cuts while enabling carbon neutrality by mid-century.

Business benefit

JFE Group's pursuit of innovation for carbon-neutral steelmaking has generated the following key business benefits:

What:

- Positions the company to thrive into the future as societal and regulatory pressures for decarbonization increase

- Enhances reputation and social license to operate by demonstrating climate leadership

- Unlocks new partnerships and investment opportunities centered around green steel

Who:

- Inspiring and motivated employees by framing climate action as an opportunity rather than a crisis and attractin forward-thinking talent by establishing vision and values around sustainability

When:

- Winning new business in the near term as customers value lower carbon footprint and long-term viability protecting against future carbon restrictions or costs

Where:

- Initiating capital projects and R&D investments concentrated in existing steelworks in Japan and also collaboration with international partners on new iron ore supply chains

How:

- Publicly articulating innovation roadmap and carbon commitments proactively signals climate leadership, pays reputational dividends

- Pursuing breakthrough technologies creates option value in emerging green steel space

By ambitiously targeting carbon-neutral steel production, JFE has taken control of its environmental destiny, boosting external credibility while catalyzing internal momentum toward a sustainable future. This clear stance yields myriad tangible business benefits.

Social and environmental benefit

The key societal and environmental benefits from JFE Group's innovation efforts for carbon-neutral steelmaking are: Reducing carbon emissions and combating climate change; Advancing decarbonization of heavy industry; Society-wide impact of lowering emissions nationally from a carbon-intensive sector and Leadership inspiring peers towards ambitious climate action.

Through tireless innovation focused on revolutionary technological leaps matched by systematic incremental improvements, JFE is charting a course towards carbon-neutral steel on a timescale aligned with planetary boundaries - setting an example for the industry, benefiting local communities, and catalyzing economy-wide decarbonization. This is sustainability leadership incarnate.

Interview

Soumya Bhattacharya, Deputy General Manager

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