• $2.2B investment in carbon-neutral steel production: JFE Steel’s new facility at West Japan Works is backed by a government grant of up to $690M to build an electric arc furnace with a 2 million-ton annual capacity.
• First mass production of high-function steel via low-carbon process: The facility aims to produce advanced steel products—including electromagnetic and high-tensile sheets—currently not achievable with conventional arc furnaces.
• Part of Japan’s national decarbonization strategy: The project supports the Japanese government’s broader push to transform high-emission industries through Green Innovation Fund-backed initiatives.

JFE Steel Corporation is advancing its decarbonization agenda with the construction of a high-efficiency, large-scale electric arc furnace at its Kurashiki facility in West Japan. The company announced today that the project will move forward following government approval of a substantial grant to support its development.

The initiative is part of a broader national project aimed at realizing carbon neutrality in steelmaking—an industry with significant emissions-reduction challenges. The Japanese government had earlier accepted JFE’s proposal to join the program, which targets energy-intensive sectors through strategic infrastructure transformation.

JFE Steel plans to invest approximately 329.4 billion yen (USD2.2 billion) in the facility. A maximum 104.5 billion yen (USD690 million) will be subsidized through government funding. The new electric arc furnace is expected to begin operations in Q1 of fiscal year 2028, with an annual steel production capacity of two million tons.

“JFE Steel will now promptly proceed with the construction of an electric arc furnace, hoping to launch a new steelmaking process based on this innovative new technology at the earliest possible date.”

The furnace will feature JFE’s proprietary and next-generation technologies designed to enable high-efficiency melting and the production of high-function steel. These advancements are being developed under the Hydrogen Utilization in Iron and Steelmaking Processes program—one of the flagship initiatives under Japan’s Green Innovation (GI) Fund, managed by the New Energy and Industrial Technology Development Organization (NEDO).

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JFE aims to leverage low-carbon direct-reduced iron and hydrogen-based reduction technologies to become the world’s first mass producer of high-grade steel products that traditional electric arc furnaces cannot manufacture.

“By combining these advanced technologies with low-carbon direct-reduced iron, JFE Steel aims to become the world’s first mass supplier of high-quality, high-function steel materials, such as electromagnetic steel sheets and high-tensile steel sheets, which cannot be produced with existing large-scale electric arc furnaces.”

To accelerate innovation, JFE has established demonstration test facilities—including a carbon-recycling blast furnace and a small-scale arc furnace—at its Chiba facility. These testbeds are central to its efforts under the GI Fund to develop ultra-innovative steelmaking processes.

“Concentrating its test facilities in one area is enabling JFE Steel to develop ultra-innovative technologies in a highly efficient manner.”

This latest initiative aligns with the JFE Group Environmental Vision for 2050, launched in May 2021, which outlines the company’s long-term strategy for climate action and sustainable industrial leadership.

“Going forward, JFE Steel is committed to developing super-innovative technologies that contribute to global sustainability.”

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