Asian Steel Mills Aim to Decarbonize Blast Furnaces

As global pressures to decarbonize intensify, major Asian steelmakers are focusing on developing innovative technologies to reduce the carbon footprint of the traditional blast furnace-based steelmaking process. Despite the inherent carbon intensity of blast furnaces, particularly in leading steel-producing countries such as China and Japan, the method remains central to the industry due to its scalability and cost-effectiveness.

However, mounting regulatory and social pressures are driving a shift toward greener alternatives, forcing steel producers to explore ways to decarbonize existing infrastructure. In Asia, where blast furnaces (BF) dominate steel production, these efforts are crucial in the global race toward green steel. Traditional BF-BOF steelmaking processes rely on carbon-rich coke to reduce iron ore, leading to high carbon dioxide emissions. As a result, the steel industry is under increasing scrutiny, with companies looking for methods to reduce their environmental impact without sacrificing productivity. The Asian steel industry faces a particularly tough challenge given its significant reliance on blast furnace technology. These furnaces are deeply integrated into the trade flow of iron ore to countries like China, which has long been the world’s largest importer of the material. Steel production in Asia has traditionally been tied to high carbon emissions, but this is changing as global demand for sustainable manufacturing practices grows.

Recent data suggests that many steel mills are actively adopting decarbonization strategies. One such method is shifting from BF-BOF to Electric Arc Furnace (EAF) steelmaking, which uses scrap steel to reduce emissions. Another promising technology involves the use of hydrogen and natural gas in place of traditional coke for iron reduction. However, these technologies require substantial capital investments, and the shutdown of older BF infrastructure could lead to significant losses for companies reliant on their long operational lives.

In light of these challenges, several Asian steel giants are making progress with decarbonization initiatives. Nippon Steel, Japan’s largest steelmaker, has recently achieved a world record for carbon emission reduction through the injection of hydrogen into its blast furnaces. In tests conducted in late 2024, the company successfully reduced CO2 emissions by 43%, a significant leap forward in the quest to make traditional steelmaking greener.

Likewise, China’s Baowu Steel Group has been pioneering hydrogen-enriched carbon monoxide recycling technology, which has already shown to cut carbon emissions by 31%. The company has also implemented carbon capture, utilization, and storage (CCUS) to address the remaining emissions from its blast furnaces.

As the demand for low-carbon steel continues to rise, particularly with the upcoming introduction of the European Union’s Carbon Border Adjustment Mechanism (CBAM), Asian steel producers are positioning themselves to meet these new market demands. Companies such as JFE Steel and HBIS Group are making strides in offering low-carbon products for key industries like automotive and construction.

The shift towards greener steelmaking is also being driven by rising consumer demand for sustainable products. For instance, JFE Steel’s green steel product, JGreeX, is now being used in a major construction project in Vietnam, marking the first export of green steel from Japan to Southeast Asia. Similarly, Baowu Steel has started shipping its low-carbon products to construction projects in China, underscoring the growing role of sustainable steel in the global marketplace.

While the transition to greener steel is well underway, the road to large-scale decarbonization remains fraught with challenges. The feasibility of these new technologies depends on a variety of factors, including the availability and cost of green hydrogen, infrastructure investments, and the ability of end-users to adopt low-carbon steel despite the associated premiums. As the industry continues to evolve, Asian steelmakers will need to balance these complex dynamics to stay competitive and contribute to the global decarbonization efforts.