Posted on 06 Jan 2021
Japan's steel industry lobby group is urging the government to continue backing nuclear power generation by adopting a growth strategy aimed at balancing the country's energy reform with manufacturing growth.
Japanese steel mills are coping with structural industry changes and working to achieve output optimisation amid a tough business environment brought about by the Covid-19 pandemic, despite a recent recovery in manufacturing activity led by the car industry, Eiji Hashimoto, chairman of industry group the Japan iron and steel federation (JISF), said today.
"Japan's steel industry is in a difficult position [in terms of] steering through market challenges brought about by China, which now makes up 60pc of global steel output, while addressing falling domestic demand because of a shrinking and ageing population, as well as declining exports," Hashimoto said.
The global Covid-19 pandemic led to a steel demand slump in Japan last year, sending domestic steel output to its lowest level in 52 years in the April 2020-March 2021 fiscal year.
Hashimoto, who is also president of Japan's biggest steel manufacturer Nippon Steel, called for the government's full support as the steel industry seeks to achieve zero-carbon steelmaking in line with Tokyo's 2050 decarbonisation goal. Hydrogen-reduction steelmaking is an option but poses technical and cost hurdles, he said.
"It is a process for decarbonisation, and it neither directly improves steel productivity nor adds product value. The government's long-term and full support is essential," Hashimoto said.
He urged Tokyo to help reduce electricity costs to make Japanese steel cost-competitive when pursuing such a costly zero-carbon steelmaking process. He also asked the government to cap an expected surge in feed-in-tariff surcharges, along with expanding renewable power output and continuing to back nuclear power, which can be a key decarbonisation option through swift restarts of nuclear reactors, as well as replacement of old reactors and newbuilds.
Premier Yoshihide Suga's government on 25 December released its "green growth strategy" to achieve the country's decarbonisation goal by 2050. Under discussion is also the country's 2050 power mix, which is provisionally targeting to boost renewable power output to 50-60pc of total power generation by then. Nuclear is expected to remain a key power source, but the 2050 ratio remains undecided.
Hashimoto said the government will also have to work out a strategy to build infrastructure for the supply of mass-produced, low-cost carbon-free hydrogen to achieve commercialisation of hydrogen-reduction steelmaking. Tokyo has been pushing to expand hydrogen use in the country, with consumption targeted to reach 20mn t in 2050.
JISF in 2018 drafted a long-term vision to develop technology to achieve zero-carbon steel production as part of efforts to curb carbon dioxide (CO2) emissions from its manufacturing process. As part of the initiative, Japanese steel producers are targeting to cut CO2 emissions by 30pc by 2050 through adopting hydrogen-based steelmaking and carbon capture technologies.
Source:Argus
