Nippon Steel to Shut 20% of Capacity by 2025 Amid Green Pivot

Japan’s oldest and largest steelmaker is cutting capacity as it contends with shrinking domestic demand and pivots operations to help meet the nation’s ambitious target of net-zero emissions by 2050.

Nippon Steel Corp. will shut one of its largest domestic blast furnaces near Tokyo as well as production lines to trim its steelmaking capacity, according to a statement on Friday. That along with previously announced measures will cut its capacity by 20% by March 2025. The company also aims to lower carbon dioxide emissions from its operations 30% by 2030 from 2013 levels, it added.

President Eiji Hashimoto is pushing through structural reforms to fend off challenges from faster growing foreign rivals -- particularly top producer China. Competition is now spreading to the development of fossil fuel-free steel manufacturing after governments in Europe, China and Japan pledged net-zero emissions in the coming decades.

Innovations for decarbonization, including the development of hydrogen reduction steel production, will require research and development costs of about 500 billion yen ($4.6 billion) and as much as 5 trillion yen in investment in facilities, the company said, which could double the cost of steel over the next 30 years.