The complementary advantages and cooperation path of green transformation in the steel industry of India, Japan, and South Korea
Recently, the Observer Research Foundation of India released a report titled "The Road to Green Steel: Opportunities for Tripartite Cooperation among India, Japan, and South Korea" written by its researchers Parul Bakshi and Krishna Vohra. The report explores how India, Japan, and South Korea can leverage their complementary industrial advantages to accelerate the transition to low-carbon emission steelmaking.
The report is based on an evaluation of key production technologies, supply chain readiness, and policy frameworks related to the steel industry in these three countries. It points out that the tripartite cooperation model can provide a practical and feasible way to promote carbon reduction in the steel industry by coordinating certification standards, promoting technology transfer, and mobilizing investment on a large scale.
Three party cooperation may lead to the optimal solution
Green steel in a broad sense refers to steel produced in a production process with significantly lower carbon dioxide emissions than steel produced through traditional methods. Common pathways include replacing fossil fuels with low-carbon emissions or renewable energy, as well as adopting carbon reduction technologies.
Different certification standards and classification systems unanimously agree that green steel involves quantifiable reduction of greenhouse gas emissions during the production process. These emission reductions are typically quantified through emission intensity targets, ranging from 0.05 to 0.4 tons of carbon dioxide per ton of steel, depending on the production process path and scrap steel content.
According to the "Net Zero Emissions Tracking of the Steel Industry" report released by the World Economic Forum in December 2024, globally, the carbon dioxide emissions from the steel industry account for approximately 7% of the total gas emissions, generating 2.8 billion tons of carbon dioxide annually. Steel is indispensable in human economic activities. According to predictions, global steel demand will reach nearly 2.5 billion tons by 2050, highlighting the necessity of reducing carbon emissions in steel production processes. In addition, the introduction of the EU Carbon Border Adjustment Mechanism (CBAM) and other measures has injected more urgency into the global steel industry's transformation.
The report points out that India, Japan, and South Korea are important steel producing countries, and these three countries have significant strategic positions in shaping the global green steel market. However, the report also mentioned that these three countries have different pressures and advantages, and seeking trilateral cooperation may lead to the optimal solution.
There are currently multiple feasible carbon reduction technology paths available
The report points out that the steel supply chain covers various links such as mining and transportation of iron ore and coal, raw material processing, ironmaking, steelmaking, casting, as well as downstream processing and distribution.
The traditional steel supply chain is based on energy inputs such as coal, coke, and fossil fuels, which leads to high baseline emissions at various stages of steel production. If the industry wants to transition to green steel, it needs to reconfigure the supply chain to support renewable electricity, hydrogen production and distribution, as well as developed scrap steel recycling systems.
Based on this, the report further systematically reviewed and compared the current feasible carbon reduction technology paths: the steel produced by blast furnace converter process accounts for more than 70% of global steel production, and is a key focus of carbon reduction work in the global steel industry; The electric arc furnace process is increasingly using direct reduced iron (DRI) for production; The hydrogen based direct reduction iron process uses green hydrogen in the direct reduction iron process, which can achieve up to 90% emission reduction compared to the blast furnace converter process. The report analysis shows that if the electricity used for the operation of the electric arc furnace comes entirely from renewable energy sources, the hydrogen based direct reduction iron process can reduce the emission intensity from about 2.2 tons of carbon dioxide per ton of steel to 0.3 tons of carbon dioxide per ton of steel.
The hydrogen injection in Blast Furnaces process refers to the injection of hydrogen into the blast furnace (a process used in ironmaking). The related projects led by Nippon Steel and JFE Steel have achieved 30% to 33% carbon reduction at the blast furnace level using this process. But some experts suggest that if scarce green hydrogen is used for the production of hydrogen based direct reduction of iron, the carbon reduction effect will be further enhanced.
The application of Carbon Capture, Utilization, and Storage (CCUS) technology in the blast furnace converter route is considered a "partial emission reduction strategy". However, this process presents significant challenges in terms of cost, energy consumption, transportation, and storage. In 2024, the CCUS operating capacity of the steel industry is only 1.75 million tons of carbon dioxide, accounting for 3.9% of the global CCUS total capacity, and the carbon capture is less than 1% of the industry's fuel related emissions. However, for countries with a large capacity of blast furnaces and converters, CCUS is still one of the few options with substantial emission reduction effects.
The Current Status of Transformation in the Three Kingdoms Steel Industry
The report points out that by the end of 2023, Japan and South Korea mainly use blast furnace converter technology, accounting for about 73% and 70% of the total steel production in the two countries, respectively. The remaining 27% and 30% of the production capacity in these two countries comes from electric arc furnaces. In contrast, India's steelmaking process structure is more diversified, with blast furnace converter accounting for about 42.7%, electric arc furnace accounting for about 21.9%, and the remaining 35.4% being induction furnace steelmaking (unlike electric arc furnaces, induction furnaces use electromagnetic fields instead of electric arcs to melt metals and are usually used for small-scale production).
India is accelerating its green transformation. In 2024, the country will introduce its first green steel classification standard, categorizing steel into three to five stars based on emission intensity, with a threshold of 2.2 tons of carbon dioxide equivalent per ton of finished steel. In addition, the government plans to allocate $2.2 billion to support carbon capture, utilization, and storage processes, and incentivize green hydrogen production through the India Green Hydrogen Transition Strategy Intervention Program (SIGHT). At present, companies such as Tata Steel have launched pilot projects for hydrogen based direct reduction of iron, but commercialization still faces economic challenges. Therefore, the Indian Institute of Energy and Resources (TERI) suggests that the country seize the opportunity of upgrading existing equipment and carry out low-carbon transformation of traditional blast furnaces to significantly reduce investment costs. At the same time, technical and financing support for local small and medium-sized enterprises will also be key to promoting carbon reduction in the country's steel industry.
The Japanese steel industry is also accelerating carbon reduction. In 2023, the country pledged to reduce emissions by 46% by 2030 and achieve carbon neutrality by 2050 through the Basic Policy for Green Transformation (GX). In 2025, Japan also revised the Green Procurement Law, requiring the government to prioritize the procurement of green steel and provide financial incentives to help steel companies reduce transformation costs. Within this year, Japan's national carbon emissions trading system will be operational, covering approximately 60% of the country's carbon emissions.
South Korea is one of the countries that has made the fastest progress in the field of hydrogen based direct reduction of iron worldwide. The government of the country has committed to achieving carbon neutrality by 2050 and has designated Pohang Holdings and Hyundai Steel as leading companies in hydrogen based direct reduction iron. It plans to build a hydrogen based direct reduction iron plant with an annual production capacity of 300000 tons by 2030 and invest 800 billion Korean won (approximately 537 million US dollars) to support related technology research and development work. In 2025, the South Korean carbon emissions trading system will reduce free quotas for the steel industry, forcing local companies to accelerate carbon reduction. The FINEX process independently developed by Pohang Holdings can achieve up to 95% carbon reduction, while HyREX technology can integrate hydrogen based direct reduction of iron with electric furnaces, providing a feasible path to replace traditional blast furnaces.
Finally, the report proposes four cross disciplinary and systematic recommendations on how India, Japan, and South Korea can build a "green steel triangle": firstly, investing in dedicated infrastructure, including renewable power electrolysis cells, hydrogen energy storage and transportation systems, power grid expansion, and scrap steel processing hubs, to promote the transformation of traditional supply chains towards electrification and circular economy. The second is to accelerate the application of green hydrogen in the direct reduction iron electric arc furnace process, which has a better emission reduction effect than the transformation of blast furnace hydrogen injection or carbon capture processes. This requires research and development support, tax incentives, and public procurement to drive supply and demand on both sides. The third is to reduce the cost of green hydrogen. The three countries should prioritize the development of domestic electrolytic cell manufacturing, expand renewable energy, establish long-term power purchase mechanisms and regional hydrogen energy corridors, and promote the improvement of hydrogen energy economy. Fourthly, establish a trilateral green steel investment framework and unify certification standards, develop standardized financial models and decision-making tools; At the same time, coordinating emission thresholds, measurement verification, and mutual recognition agreements to reduce transaction costs.
China Metallurgical News (July 24, 2026, 2nd edition, 2nd edition)
Source: China Metallurgical News - China Steel News Network