The steel industry's Dual Mandate—the simultaneous pursuit of deep decarbonization and stable, high-quality supply—requires more than reliance on electric arc furnaces (EAFs). Building on Part 1's establishment of the critical supply role of BFs, Part 2 now delves into the core challenges of blast furnace materials: specifically, how superior quality is achieved and how the high CO2 emission issue will be fundamentally resolved through hydrogen innovation.
It's worth noting again that steel production methodology is fundamentally shaped by timing and the path of industrial development: Nations utilizing substantial virgin iron ore, such as China and Japan, employ the Blast Furnace-Basic Oxygen Furnace (BF-BOF) route—accounting for over 70% of their crude steel output. Conversely, regions with rich local scrap supplies, like the U.S. and the EU, predominantly employ the EAF method. (Source: World Steel Association).
As one to ONE Group, leveraging over 90 years of Japanese steel expertise, we recognize that achieving a Net Zero future requires the simultaneous and balanced advancement of both BFs and EAFs. Continuing from Part 1, we will now outline our strategic view on the roles and importance of both technologies in meeting the global climate mandate.
Why BF Steel is Essential for Advanced Social Needs | Material Purity and Volume
Beyond scrap supply constraints, as highlighted in Part1, the continued relevance of blast furnace materials lies in the superior functionality achievable through their manufacturing process.
Iron produced in a blast furnace is refined by removing impurities from iron ore. This process minimizes the effects of contaminants like copper and tin—which are often introduced when using scrap steel as a raw material—allowing for the creation of complex functional properties through delicate component adjustments.
Simply put, the ability to stably produce large quantities of high-quality iron remains a significant advantage of the blast furnace method.
In recent years, global demand for highly functional and environmentally friendly materials has surged. This is driven by the rapid growth and complexity of renewable energy equipment, such as solar and wind power, as well as the worldwide shift to Electric Vehicles (EVs). Manufacturing this equipment requires steel that is both high-quality and highly functional—meaning materials that can meet diverse, sometimes conflicting demands, such as being "light yet strong" or "strong yet easy to process."
While electric furnace materials continue to evolve, it is currently fair to say that blast furnace materials are essential for meeting the most advanced social demands in terms of both quality and sheer volume.
Understanding this context and the underlying circumstances makes recent news, such as Nippon Steel's acquisition of U.S. Steel, much easier to grasp.
Decarbonization Breakthrough | Hydrogen Reduction Steelmaking (HRS)
Though blast furnace materials are indispensable, realizing a truly "carbon-neutral" and "decarbonized society" requires overcoming the process's fundamental issue: high CO2 emissions.
To tackle this challenge, Japanese steelmakers are aggressively pursuing research and development into "hydrogen reduction steelmaking (HRS)," a technology that aims to revolutionize the blast furnace process itself through decarbonization.
What is "Hydrogen Reduction Steelmaking"?
In the conventional blast furnace method, coke (carbon) is used as a reducing agent to remove oxygen from iron oxide (which makes up iron ore). However, the reaction between carbon (C) and oxygen (O₂) generates CO₂.
In contrast, "HRS" is a technology that uses hydrogen (H₂) rather than carbon as the reducing agent. When the iron oxide in the ore is reduced, the byproduct is not CO₂ but H₂O (water). In other words, realizing hydrogen steelmaking would drastically reduce CO₂ emissions in the iron-making process, enabling the stable, continued supply of clean, CO₂-free steel products.
However, developing this ambitious technology will take time. While the initial goal is to launch the first commercial plant by 2030 and achieve large-scale implementation by the mid-2040s, full societal integration is projected to require a sustained effort of at least two to three decades.
Addressing the Multi-Decade Gap | Balancing EAF Maximization with BF Stability
To realize a carbon-neutral and decarbonized society, it is essential at this juncture to first maximize decarbonization by making the most effective use of the world’s existing scrap steel through electric arc furnaces.
Simultaneously, it is crucial to maintain a stable supply of steel—in terms of both quantity and quality—through blast furnaces to meet the expected increase in global demand and increasingly sophisticated social needs.
It is neither realistic to meet all steel demand with electric arc furnaces abruptly nor to convert blast furnaces to hydrogen steelmaking immediately.
We believe the most realistic and stable approach for the Japanese steel industry to contribute to a "carbon-neutral" and "decarbonized society" is to advance these two distinct steelmaking processes in a well-balanced manner.
Our Commitment: A Proactive Approach to Sustainable Steel
As a group handling an extensive portfolio of steel products, we recognize that decarbonization is a critical social issue that must be addressed seriously and fundamentally.
This challenge is framed by the current resource-based division of global steel production, as earlier mentioned.
Therefore, this report has outlined our perspective on the significance and complementary roles of electric furnaces and blast furnaces. Our analysis considers the current status of the Japanese steel industry, where our core company operates, alongside the larger goal of realizing a "carbon-neutral" and "decarbonized society."
To contribute to this vital goal, we are determined to execute what is achievable today with a "straightforward and proactive" approach, backed by the best possible understanding of the necessary technical and social conditions.
