Japan: JSF revises green steel guidelines to help user industries address Scope 3 emissions

The Japan Steel Federation (JSF) has revised its guidelines for calculating green steel using the mass balance method. The guidelines, which were first formulated in September 2022, have been updated with detailed rules on the definition of green steel, how to calculate actual reductions, and reduction methods.

JSF's goal in revising the guidelines is to increase transparency and credibility so that steel consumers can count the purchase of green steel toward their Scope 3 emissions. It is expected that the clarification of the rules will also lead to an expansion of the green steel market.

Under the mass balance method, carbon dioxide (CO2) emissions from raw materials, fuels and conversions in the manufacturing process are attributed to each steel material to be produced or sold, and the amount is considered "green". Until now, steelmakers have been obtaining certification from a third-party organisation. The JSF believes that by presenting clear rules, it can increase the usability of green steel for user industries, such as being included in Scope 3 reduction results.

The revised guidelines set out detailed rules for calculating actual reductions and reduction methods. For example, the rule was established that individual companies must bear the additional costs themselves in order to be counted as a reduction record. This additional requirement means that both blast furnace and electric furnace steel manufacturers can offer green steel.

There is a growing movement among steel users to become aware of Scope 3 emissions, which are indirect emissions that occur upstream and downstream of a company's operations. In response to these developments, the Japanese government has also clarified the requirement that a reduction certificate must accompany the sale of green steel. The certificate proves the user's Scope 3 reduction and also clarifies the rule that the certificate alone cannot be sold.

The JSF's revision of its green steel guidelines is a positive step towards increasing transparency and credibility in the market. The new rules are expected to make it easier for steel users to purchase green steel and count it towards their Scope 3 emissions. This will help to support the development of a more sustainable steel industry.

Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.