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Toyota Motor Corporation of Japan has reportedly begun procuring low-carbon "green steel," a move expected to encourage more steel companies to adopt low-carbon production methods such as electric arc furnaces, thereby reducing carbon dioxide emissions.
Toyota began procuring green steel from Nippon Steel, JFE Steel, and Kobe Steel before the end of last year. 64F200 Non oriented magnetic steel, Similar to other suppliers, Toyota will receive certification documents for emissions reductions in the steel production process, which it will use to calculate and disclose the carbon reduction effects in its vehicle products.
Compared to traditional blast furnace steelmaking, which primarily uses coal, electric arc furnace steelmaking can reduce carbon dioxide emissions by approximately 75%. However, green steel is about 40% more expensive than conventional steel, and the Japanese government helps reduce end-use costs through subsidies. Earlier this fiscal year, the Japanese government launched a support policy, providing subsidies of up to 50,000 yen (approximately US$320) per plug-in hybrid or pure electric vehicle manufactured using green steel.
Before Toyota, Nissan and Isuzu had already adopted green steel. As the world's largest automaker, Toyota's entry is expected to have a significant demonstration effect on the entire industry chain. 64F200 Non oriented magnetic steel, Nissan has been using green steel in its mass-produced models since fiscal year 2022, and announced at the end of January this year that its new Leaf model uses green steel supplied by JFE Steel. Nissan's green steel procurement this fiscal year will be approximately five times larger than in fiscal year 2023, and it will expand its supply sources. Isuzu announced last April that it would use green steel in its electric trucks.
Blast furnace steelmaking requires large amounts of coal as fuel and reducing agent during production. The steel industry accounts for approximately 40% of Japan's total industrial carbon emissions, while the automotive industry accounts for half of Japan's general steel consumption.
As one alternative to blast furnaces, steel companies are accelerating the development of electric arc furnace (EAF) steelmaking, which uses electricity to melt scrap steel to produce steel. In 2022, Nippon Steel put a 700,000-ton-per-year EAF into operation at its Setouchi plant in Hyogo Prefecture; JFE Steel plans to build an EAF project at its East Japan Steel Works in Chiba this fiscal year.
With technological advancements, the quality of EAF steelmaking using scrap steel has significantly improved, and the bottlenecks that previously limited its application in high-end steel are gradually being eliminated. Nippon Steel has already achieved EAF production of high-grade steel for electric vehicle motors, with quality comparable to that produced using blast furnaces.
As of February 2025, Nippon Steel's cumulative output from its Setouchi electric arc furnaces exceeded 1 million tons, but this still represents a small proportion of its total annual crude steel output of approximately 40 million tons. 64F200 Non oriented magnetic steel, The company plans to invest 868.7 billion yen to build three new electric arc furnaces with a total capacity of 3 million tons per year, expected to commence operation in fiscal year 2028-2029.
JFE Steel also plans to invest 329.4 billion yen to convert one of its blast furnaces at the Okayama West Nippon Steel Works into a large electric arc furnace with an annual capacity of 2 million tons, expected to commence operation in fiscal year 2028.
