ACCR Company Engagement Nippon Steel Corporation
Based in Japan, Nippon Steel has four main business segments; steel manufacturing, engineering, chemicals and system solutions. Formerly known as Nippon Steel & Sumitomo Metal Corporation, it changed its name to Nippon Steel Corporation in April 2019.
Steel manufacturing is the dominant source of Nippon’s greenhouse gas emissions, which in FY2021 were 103.29 MT CO2-e pa for Scope 1, 2 and 3. Investors in the company see its corporate value depending upon a credible decarbonisation strategy for its steel making business, with short, medium and long-term GHG emissions reduction targets aligned with the goals of the Paris Agreement.
Nippon’s decarbonisation plan is not currently aligned with the IEA’s NZE 1.5C pathway and its roadmap relies heavily on technologies unproven to reduce material emissions at scale (Course50/SuperCourse50). Nippon Steel's carbon intensity for its steelmaking operations has remained unchanged, despite achieving a 27% reduction in absolute emissions from its 2013 baseline, largely attributable to decreased production levels.
In December 2023, Nippon Steel announced it would purchase US Steel for $US14.9 billion. After the acquisition closes in 2024, Nippon Steel’s production capacity will increase to approximately 86 million tonnes of crude steel per year, significantly expanding its carbon footprint.
ACCR has engaged with Nippon Steel since 2023 on its decarbonisation measures, along with institutional investors Man Group and Storebrand Asset Management, and Corporate Action Japan (CAJ).
Details of Nippon Steel’s announced steel and iron decarbonisation projects, which feature in ACCR’s global coverage of the steel sector’s emission reduction efforts, can be found here.
