• Reducing CO₂ emissions is company’s most important management issue
• Supply volume expected to be 300,000 tons per year

Nippon Steel will launch sales of “NSCarbolex Neutral,” a steel product that is certified as reducing CO₂ emissions in the steelmaking process, in the first half of fiscal 2023.

Nippon Steel has set forth the “Nippon Steel Carbon Neutral Vision 2050” and is working to reduce CO₂ emissions as its most important management issue. NSCarbolex Neutral is a steel product that is certified as reducing CO₂ emissions in the steelmaking process by allocating CO₂ emissions that Nippon Steel has reduced in-house through these measures. With the rapid growth of decarbonization needs in society, we assume that for our customers, delays in decarbonization can be a factor in losing competitiveness. By quickly establishing a stable supply structure for NSCarbolex Neutral, Nippon Steel will contribute to decarbonization at its customers.

As a certification method of reducing CO₂ emissions, we are considering adopting a method (the mass balance method) in which the total amount of CO₂ emissions that Nippon Steel has actually reduced by reforming and improving manufacturing processes, etc. is determined and allocated to any given steel product. The steel industry has significant CO₂ emissions in upstream processes (blast furnaces, etc.), which are essential for the manufacture of various steel products, and it is expected to take time to develop decarbonization technologies. However, the use of this method will enable us to respond quickly to customer needs for steel products with reduced CO₂ emissions. In addition, unlike the procurement of CO₂ emission allowances through emissions trading, this method is based on the actual reduction of CO₂ emissions through process reform and improvement by steelmakers themselves and is therefore gaining attention and becoming more widespread as a method for promoting CO₂ emissions reduction. In addition to the CO₂ emission reduction certificate issued by Nippon Steel, NSCarbolex Neutral will be provided with a third-party certificate to ensure impartiality. We plan to use JIC Quality Assurance Ltd. (JICQA) as a certifying organization and have already confirmed validation of the mass balance method.

Through research and development, Nippon Steel is working to reduce CO₂ emissions by commercializing advanced and innovative manufacturing processes and will apply these results to the supply of NSCarbolex Neutral. In the near term, we plan to take advantage of the CO₂ emission reduction effects of the new electric furnace in the Setouchi Works Hirohata Area (scheduled to start commercial operation within 2022), and we also plan to progressively take advantage of the effects of other CO₂ emissions reduction measures to expand the supply volume of NSCarbolex Neutral.

See related article: U. S. Steel Announces Closing of $290 Million Green Bonds

【Date of sales launch】
First-Half FY2023
(We plan to start supplying the product when its CO₂ emission reduction effect is confirmed and certification from the third party is obtained.)

【Supply volume】
Supply volume in fiscal 2023 is expected to be about 300,000 tons per year, calculated by basic unit conversion of steel product certified with virtually zero CO₂ emissions.
(*Supply volume will vary depending on the scale of Nippon Steel’s CO₂ emission reductions)
We will begin discussing specific sales terms and conditions with customers individually.

【Product types for sale】
All steel products manufactured by Nippon Steel (Product types)
There are no restrictions on product types or production methods.

【Selling prices】
Undecided. However, we are considering to obtain certain premium.
Various factors such as social systems and the value and cost of reducing CO₂ emissions are uncertain at the moment and a premium to the prices of steel products is expected to fluctuate depending on the changes in the environment.
 
【Method of allocating effects of CO₂ emission reductions】
1. Allocation method in the steel industry

2. Relationship between CO₂ emissions and CO₂ emissions intensity before and after allocating CO₂ emission reduction (Concept map)

Note that this method is also specified in ISO (International Organization for Standardization) standards and has already been adopted by the chemical industry and some steel manufacturers.

Source: Nippon Steel Corporation