Climate Lobbying Overview: JFE Steel has engaged negatively on numerous climate policies, including carbon taxes, emissions trading, and the feed-in tariff, and has taken a mixed position on the energy mix. The company retains executive positions in several key industry associations opposing climate policy, such as the Japan Iron and Steel Federation (JISF).

Top-line Messaging on Climate Policy: JFE Steel has often taken negative positions in its top-line messaging on climate policy. In a joint meeting between the Ministry of Economy, Trade and Industry (METI) and the Ministry of Environment (MoE) Global Warming Countermeasures Study Working Group in February 2021, JFE Steel stated that it supports “Japan’s ambitious policy” of 2050 carbon neutrality. However, in the joint meeting in December 2020, JFE Steel raised concerns that setting the national 2050 carbon neutrality target in “a linear manner” may hinder innovation, as “innovation is not a linear process.” In the same joint meeting in May 2021, JFE Steel urged the government to “mobilize various policy tools” in the Global Warming Countermeasures Plan while “assessing the effects and costs of the policies.” It also stated that “toward carbon neutrality in 2050, a significant investment will be required in the future,” emphasizing that “it is a prerequisite that the public has a correct understanding of these severe aspects” of higher costs. In the same joint meeting in August 2021, JFE Steel appeared to question the impression that “science equals the IPCC report” in the Long-Term Strategy under the Paris Agreement as a Growth Strategy and requested that “a strong appeal” be made for “Japanese science and technology.” No evidence could be found on JFE’s position on UN Climate Treaties, such as the Paris Agreement.

Engagement with Climate-Related Regulations: JFE Steel has actively engaged in opposition of various climate-related policies, particularly carbon taxes, emissions trading (ETS), and the feed-in tariff. In the METI-MoE joint meeting in May 2021, JFE Steel stated that “concrete policies” were “more desirable than uniformly applied policies such as carbon taxes and emissions trading.” In the MoE Subcommittee on Carbon Pricing in May 2021, JFE Steel pointed to industrial exemptions from carbon taxes and ETS in Europe, seemingly to request similar exemptions for industry in Japan, in addition to raising concerns of carbon leakage. The company’s position appears to have continued over time, as it previously made similar statements in the same committee in June 2019. In the same committee in February 2021, JFE Steel argued that the high energy costs paid by Japanese industries equate to a sufficient price on carbon and should be recognized by the EU and US carbon border adjustment mechanism (CBAM). In the same committee in July 2021, JFE Steel advocated to weaken feed-in tariffs, citing high-cost burdens and referring to it as “essentially a carbon price.”

While JFE Steel supported energy efficiency investment policy in the METI Energy Conservation Subcommittee, it emphasized that there is currently little room for further improvement in March 2021. JFE Steel has also appeared to question the feasibility of the government’s 2030 greenhouse gas emissions reduction target, arguing in the METI-MoE joint meeting in August 2021 that the government’s “ambitious” target was set from “top-down” compared to voluntary targets set by industry through “accumulation” based on the best-available technology (BAT), and that “it is difficult for individual industry groups and companies to respond practically if they are asked to harmonize their goals with the nation as a whole.” In the same joint meeting in April 2021, JFE Steel stated that “Japan should be proud” that it has a “functioning system to ensure that companies and organizations implement and follow up on the goals that they voluntarily set and declare, without compulsion or penalties.”

Positioning on Energy Transition: JFE Steel has taken a negative position on decarbonizing the power sector, while taking a mixed position on decarbonization of the steel industry, often emphasizing high R&D costs. In the METI-MoE joint meeting in August 2021, JFE Steel argued that the Long-Term Strategy under the Paris Agreement as a Growth Strategy “should show the determination to resolutely overcome the very difficult problem of moving away from fossil fuels,” while emphasizing the importance of S+3E (Safety, Energy Security, Economic Efficiency, and Environment) as a “prerequisite for renewable energy.” In the METI Energy Conservation Subcommittee in March 2021, JFE Steel recognized the necessity of electrification by 2050 based on non-fossil power sources including renewable energy and nuclear power, while emphasizing concerns of high costs, arguing that “the first priority is to realize an inexpensive and stable power supply.” In addition, it suggested that ammonia and hydrogen would be preferable in private power generation over “unrealistic” options such as wind or solar power. In a news release on the JFE Steel corporate website in July 2021, the company stated that toward reducing GHG reductions, “it is important to implement promising zero-emission fuels such as ammonia as marine fuels in society.” In the METI-MoE joint meeting in May 2021, JFE Steel requested increased public support for decarbonization technologies. In the same joint meeting in July 2021, JFE Steel appeared to express reservations about the decarbonization of the steel industry due to the “huge cost burden,” stating that “without the correct understanding and consent” of the public due to increased costs of goods and services, carbon neutrality will not be possible.

JFE Steel’s position on the energy transition appears to be more negative than the position taken by the parent holding company. The JFE Group Report published on the JFE Holdings corporate website in December 2021 stated that “offshore wind power generation will be a key to expanding renewable energy in Japan, which is why the Japanese government has set medium- to long-term targets for rolling out wind power.” Similarly, JFE Holdings President and CEO Koji Kakigi told ITmedia that “toward greenhouse gas reductions, new nuclear power has high hurdles and solar is reaching its limits, so offshore wind will be the only option for the rest.” In the JFE Group Report published on the JFE Holdings corporate website in December 2021, JFE Holdings President and CEO Koji Kakigi expressed support for government assistance for “the creation of a framework for society to bear the projected huge increases in costs for R&D, investment in prototypes, and procuring green hydrogen and electricity” for decarbonized steelmaking, stating that “through enhanced coordination with society we hope to achieve carbon neutrality by 2050.”

Industry Association Governance: JFE Steel publishes its CSR information through the JFE Holdings website and submits its CDP disclosures through JFE Holdings. The JFE Group CSR report disclosed its membership in the Japan Business Federation (Keidanren) and the Japan Iron and Steel Federation (JISF), which have both lobbied negatively on a number of climate-related policies. JFE Steel appears to lack a detailed disclosure of its policy positions and direct and indirect lobbying activities. The JFE Steel President and CEO Yoshihisa Kitano is the Chairman of JISF, and numerous JFE Steel and JFE Holdings executives hold key positions within JISF and Keidanren. JFE Steel President and CEO Kitano is also on the Executive Committee of the World Steel Association (worldsteel), which has had some active and mixed engagement with climate change policy. In addition, a JFE Steel executive is a Board Trustee of the Japan Coal Frontier Organization (JCOAL), which has lobbied for a sustained role for coal in the Japanese energy mix.