Nippon Steel announced on the 16th that it will construct a new electric arc furnace at the Košice steelworks in Slovakia. The investment amounts to €900 million (approximately ¥160 billion / $1.0 billion), with operations scheduled to commence in 2030. The steel industry is a major emitter of carbon dioxide (CO2), and the shift to electric arc furnaces has become a critical lever in advancing decarbonization strategies. Through this investment, Nippon Steel aims to expand the supply of green steel in Europe.
The new facilities will be installed at the steelworks owned by U.S. Steel Košice (USSK), a subsidiary of U.S. Steel, the American steel giant that Nippon Steel acquired in 2025. The project involves constructing an electric arc furnace with an annual production capacity of approximately 1.6 million tons, along with an oxygen plant that will produce oxygen used to remove impurities from molten steel. The oxygen plant is expected to begin operations in 2029, ahead of the electric arc furnace.
Of the €900 million investment, €350 million will be funded through subsidies from the Slovak government. Nippon Steel has signed a subsidy agreement with the Slovak government, under which funding will be disbursed through the European Union’s Modernisation Fund via the Slovak government.
The Košice steelworks currently operates three blast furnaces—one of which is idled—with a total production capacity of 4.5 million tons. Nippon Steel is expected to consider idling existing blast furnaces in tandem with the ramp-up of the new electric arc furnace.
The facility primarily manufactures steel sheet for automotive applications. Once the new electric arc furnace is operational, Nippon Steel plans to supply low-environmental-impact green steel to the European market. Green steel refers to steel products that are considered low-carbon by virtue of verified CO2 reductions achieved through improvements in the steelmaking process.
Nippon Steel is also restructuring its organizational framework. USSK will become a direct subsidiary of Nippon Steel effective October 1 and will be renamed “Nippon Steel Slovakia” (NSSK).
In Europe, steelmakers are accelerating their shift to electric arc furnaces amid the introduction of the Carbon Border Adjustment Mechanism (CBAM) and mounting decarbonization demands from automakers. Nippon Steel is also advancing new electric arc furnace construction and conversion at its Japanese operations, and the Slovakia investment represents a move to strengthen its green steel supply capabilities overseas.
By establishing a framework capable of supplying low-carbon steel products to the European market, Nippon Steel aims to deepen its trading relationships with automakers and other customers. On the other hand, procurement costs for scrap and reduced iron—key raw materials for electric arc furnaces—as well as electricity price volatility could affect profitability.
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