Voluntary Energy Management in the Japanese Steel Industry

by Hiromi Kawamata, Junichi Tamura, Kenichiro Fujimoto

Publisher - The Japan Iron and Steel Federation (JISF), Japan, Nippon Steel & Sumitomo Metal Corporation, Japan

Category - Engineering & IT

New framework to address climate change has entered into force on 4th November 2016 as “Paris Agreement”, which was adopted at COP21 in December 2015. Under the agreement, all countries will have greenhouse gas (GHG) reduction targets and combat climate change. As a result, there will be increasing pressure on countries to establish GHG reduction targets for the steel industry, which is an energy-intensive industry with substantial GHG emissions, and to take the actions needed to reach the targets. Some people believe that governmental economic measures are an effective method for promoting energy conservation and lowering GHG emissions in all industries, including the steel industry. Typical methods are governmental regulations, benchmarks, carbon taxes, or emission trading schemes (ETS). Regulatory approach can be effective to some extent as long as a level playing field is maintained among different countries. But accomplishing this is virtually impossible. Only a few countries may decide to establish very strict restrictions or a high carbon tax. This would threaten the very survival of the steel industry in those countries, which is highly vulnerable to global competition. In Japan’s steel industry, the basis for energy conservation and GHG emission reductions is the “voluntary method.” Goals for the reductions for the entire industry are established and companies then make efforts to accomplish these goals. Reviews of progress are performed by government councils and other third party entities. The current goal is to lower the steel industry’s CO2 emissions by 5 million tons on a BAU basis by 2020. Steel mills in Japan are improving production processes, replacing outdated equipment and taking other steps to reach this target. Steelmakers are also sharing good practice know-how and using other methods to step up activities for reaching the target. In addition, the steel industry is aiming for a BAU CO2 emission reduction of 9 million tons by 2030. The 2030 target is also reflected to the intended nationally determined contributions (INDC) that the Japanese government submitted to the United Nations. There are doubts about the voluntary method with regard to transparency and effectiveness. In response to these concerns, JISF became the first industry association in the world to receive ISO50001 certification for energy management systems in February 2014. This certification is proof that energy management methods of Japanese steel industry comply with international standards.

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