Japanese steelmaker Nippon Steel is looking to produce low-carbon raw materials, including “reduced iron” made using hydrogen, for green steel, reported Reuters.

The aim is to cope up with the surging demand for green steel.

Reduced iron is produced by removing oxygen from the iron ore. This makes metallic iron without melting it.

Currently, natural gas is used to produce reduced iron. However, global steelmakers are considering the use of hydrogen for reduced iron manufacturing to make the steelmaking process CO2-free.

Nippon Steel President Eiji Hashimoto was quoted by Reuters as saying in a news conference: “We will be involved in raw materials as our own business, instead of simply procuring raw materials (such as iron ore and coking coal).

“To advance decarbonisation, we will need reduced iron. Our company will make it as our new business.”

The Japanese firm would also consider investing in projects to produce hydrogen-reduced iron with potential partners, Hashimoto added.

Hashimoto noted that Nippon Steel would mull joining an iron ore project, which has its own hydrogen plant capable of producing hydrogen from green electricity.

He further noted that coking coal would ensure continuity of steelmaking alongside efforts to decarbonise the process.

“High-quality coking coal is necessary to proceed smoothly with decarbonisation. We want to ensure stable procurement of coking coal by increasing our interests (in mines),” Hashimoto added.

Nippon Steel holds stakes in multiple iron ore mines and coking mines.

Earlier this year, ArcelorMittal Nippon Steel India, a joint venture between ArcelorMittal and Nippon Steel, commenced the Rs600bn ($7.2bn) expansion of Hazira flat steel plant in the Indian state of Gujarat.

This will boost the plant’s crude steel capacity from nine million tonnes per annum (Mtpa) to 15Mtpa.