Nippon Steel Carbon Neutral Vision 2050

1 TSE Securities Code: 5401 March 30, 2021 Nippon SteelCarbon Neutral Vision 2050A Challenge of Zero- Carbon Steel 2021 Nippon Steel CORPORATION All Rights of Contents1. Scenario to realize Zero- Carbon SteelP. 32. CO2emissions in steelmaking processP. 93. Breakthrough technology development(1) High-grade Steel production in large-sized (2) Hydrogen injection into (3) 100% hydrogen use in direct Technological challenges and required external conditions : Carbon : BF: Blast Furnace, BOF: Basic Oxygen Furnace, BT/Y: Billion Tons per Year,CCS: Carbon Capture Storage,CCU: Carbon Capture Utilization,CCUS: Carbon Capture Utilization Storage, DRI: Direct Reduced Iron, EAF: Electric Arc Furnace, H2: Hydrogen, HBI: Hot Briquetted Iron, MT/Y.

2 Million Tons per Year 2021 Nippon Steel CORPORATION All Rights Scenario to realize Zero- Carbon Steel 2021 Nippon Steel CORPORATION All Rights Steel Carbon Neutral Vision 2050 The Challenge of Zero- Carbon SteelAdopting " Nippon Steel Carbon Neutral Vision 2050 The Challenge of Zero- Carbon Steel , as our own new initiative against climate change, a critical issue affecting human beings, we will strive to achieve Carbon neutrality by 2050 as our top priority management issue. We have decided to actively work to achieve zero- Carbon Steel as a top priority management issue, and have established a new "Key Phrase" to summarize our environmental management and an "Activity Logo" to represent our activities as our "Environmental Brand Mark". We will make a concerted effort to tackle these extremely difficult PhraseActivity Logo 2021 Nippon Steel CORPORATION All Rights Steel : Our CO2 emissions reduction scenarioVision 2050[Scope of Scenario]DomesticSCOPE I + II(Receipt of raw materials to product shipment) + (CO2at the time of purchase power production)102 91 702013 20192030 Target2050 VisionCarbonOffsetTotal CO2emissions (MT/Y)30% reduction(Vs.)

3 2013)CarbonNeutral2030 Target[Means] Actual implementation of the COURSE50 in the existing BF and BOF process Reduction of CO2emissions in existing processes Establishment of an efficient production framework.[Means] Mass-production of high-grade Steel in large size EAFs Hydrogen reduction steelmaking (by Super-COURSE50 use of BFs; direct reduction of 100% hydrogen) Multi-aspect approach, including CCUS* and other Carbon offset measures,.30% or more reduction in total CO2 emissions vs. 2013 Aim to become Carbon Neutral * Carbon dioxide Capture, Utilization, and Storage 2021 Nippon Steel CORPORATION All Rights steelmaking processIronmakingSteelmakingOUTPUTPROCES SINPUTBOFR olling millEAF processBF + BOF processIron oreCoalScrapElectric powerCO2CO2CO2BF 2021 Nippon Steel CORPORATION All Rights technologiesCCUS*Chemicals, biofixing, underground storageCarbon Neutral steelmaking processHigh-grade Steel production in large size EAFI ronmakingSteelmakingSuper-COURSE50 BFIncreased use of scrapOUTPUTPROCESSINPUT3 external conditions required for realizing zero- Carbon steelBOFR olling millEAF routeBF and BOF routeIron oreCoking coalScrap* Carbon Capture, Utilization.

4 And StorageCarbon free hydrogenCarbon free powerCO2CO2100% hydrogen use in direct reduction processDirectly reduced ironDirectly reduced iron 2021 Nippon Steel CORPORATION All Rights CO2emission in existing processes (advance in existing technology, expanded use of scraps and waste plastics, etc.)Our roadmap of CO2 emissions reduction measures-30%(vs FY2013)CO2 reduction targetHydrogen injection into BFLower Carbon power (higher-efficiency power generation facilities, use of low Carbon fuel in coal-powered generation, etc.)Building of an efficient production systemCarbon neutralProduction of high-grade Steel in large size EAFsDev tPractical implementation100% hydrogen use in direct reductionDev tCCS (underground storage)/CCU (re-use)Dev tSuper-COURSE50 Dev tPractical implementationActual demonstration testCOURSE50 Dev tPractical implementationActual demonstration test(Kimitsu)2008 Practical implementationEAF routeBF and BOF routeBreakthrough technology development(centralized production at an integrated Steel mill, etc.)

5 (some transfers from BFs to EAFs, etc.)External conditions 2021 Nippon Steel CORPORATION All Rights CO2emissions in steelmaking process 2021 Nippon Steel CORPORATION All Rights 102030CO2 emissions in steelmaking processCommercial-use19%Industry39%Trans portation20%Energy conversion 8%Households 16%Otherindustries23% Nippon Steel9%Other steelproducers 6%Japan s CO2emission by sector Steel is an Earth-friendly material as Steel produces less CO2per unit of production and during its entire life cycle, compared to other materials, and is highly recyclable. The total amount of CO2emitted by the Steel industry is high since Steel has an overwhelmingly wider range of applications and is used extensively in large quantities compared to other application of Steel productsCommercial-use 6%Industry25%Transportation18%Energy conversion39%Households 5% 9%Non-energy source7%By emitting sectorBy using sectorSteel industryAutomotive material s CO2emission in productionPackaging material s CO2emission in production050100150 kg-CO2eq/kg-Material) kg-CO2eq/kNm)Source.

6 Ministry of the Environment, National Greenhouse Gas Inventory Report of Japan 2020 AluminumCarbon fiber reinforced plasticsSteelSteelAluminumPlastic(polypr opylene)Paper(milk carton) 2021 Nippon Steel CORPORATION All Rights iron ore that exists as iron oxides( , Fe2O3) in nature,Iron ore needs to be reducedSteelis ton of steelmaking emits about 2 tons of CO2 FeFe2O3CO2 CCarbon (C) removes the oxygen (O) (reduction) in the iron ore as Carbon is more reactive than iron (Fe).In nature, iron exists as oxides, iron produce Steel products, oxygen must be removed (= reduced) from iron use of Carbon (coal) is the best, stable, cost-effective method for reducing iron ore in large reaction, however, emits 2021 Nippon Steel CORPORATION All Rights (Appendix) BF method steelmaking oxideCCarbonFeMolten iron Sintering machineCoke ovenBOFC ontinuous casterSteel productsCoking coalBFCO2 Iron ore1) Iron oxide is removed of oxygen (reduced) and melted,2) transported in liquid state,3) removed of impurities,4) solidified into semi-finished products with standardized sizes,and 5) processed into Steel Annealing 2021 Nippon Steel CORPORATION All Rights in steelmaking processCoke (Iron ore reduction) (t-CO2/Hot-rolled coil)

7 Basic oxygen rolling to majority of CO2emissions in the steelmaking process is derived from the iron ore reduction process in the blast : Carbon Trust: International Carbon Flows (2011) 2021 Nippon Steel CORPORATION All Rights S. Korea Germany China France Brazil India Russia eco-friendly efforts to address climate changeEco Products(What we produce is eco-friendly )Provides a wide variety of high-performance Steel products, contributing to reduction of CO2emissions in useEco Solution (Sharing our eco-solutions )Transfers best-available energy-saving technologies mainly in developing countriesEco Process(The way we manufacture is eco-friendly )Japan s steelmaking process is the most energy-saving in the higher fuel efficiency with lightweight, higher safety and high processabilityReduce energy loss of motors and transformersImproves the strength, safety, workability, and life of the hydrogen infrastructureElectrical Steel sheetsHigh-strength stainless Steel HYDREXELTMfor high-pressure gaseous hydrogenHigh strength Steel sheets for vehiclesEnergy intensity in BOF Steel production (Japan = 100) Source: RITEB reakthrough technologies to realize Carbon - Neutral Steel 2021 Nippon Steel CORPORATION All Rights 30 billion tonsApprox.

8 70 billion billion peopleX4 billion peopleX7 t/personGlobal Steel stock increases1680190020002100 Source: world Steel association(ton/capita) Steel stock in the form of final products, such as infrastructure ( , buildings and bridges), industry ( , machinery and ships), and durable consumer goods ( , automobiles and home appliances) is 30 billion tonsor 4 tons per capita globally, although 8-12 tons per capita in developed countries. Expected to reach 10 tons per capita in China by 2050 and in India by Steel stock: 70 billion tons in 2050 Assumption: Steel stock per capita of 7 tons in 2050, Global population growth from billion in 2015 to billion in 2050, Economic growth in emerging countries, and Efforts to SDGs. Steel stock per capitaGlobal Steel stockSource: JISF, Long-term Vision for climate change mitigation:A challenge towards zero- Carbon steel2015 2021 Nippon Steel CORPORATION All Rights Steel production is necessary to increase Steel stock in the Steel production needed to meet global Steel stock growth will continue to scrapPrompt scrapHome scrapAvailability of scrap increases as the increase of Steel if all the scrap is recycled, it is insufficient to meet the annual need for crude Steel production, and Steel production from iron ore will need to be at the same scale in the order to achieve zero- Carbon Steel , it is necessary to reduce CO2emissions not only from scrap recycling but also from iron ore scrap availabilityGlobal crude Steel production estimatesGlobal pig ironproduction estimatesObsolete scrap.

9 Available from end-of-life productsPrompt scrap: Generated in production of Steel -based productsHome scrap: Generated in the steelmaking process* Figures are : JISF, Long-term Vision for climate change mitigation: A challenge towards zero- Carbon Steel 2021 Nippon Steel CORPORATION All Rights Breakthrough technology development(1) High-grade Steel production in large-sized EAFs 2021 Nippon Steel CORPORATION All Rights EAFs for high-grade Steel in Nippon SteelSecondary refiningContinuous castingEAFHot-rollingPickling/cold-rolli ngHot-dip galvanizingPicklingSlab from other sitesNewly builtContinuous annealingSecondary refiningContinuous castingEAFHot-rollingPickling/cold-rolli ng/annealingHot-dip galvanizingSlab from other steelworksPicklingCold-rollingAnnealingF inishingElectro-galvanizingElectrical Steel sheet lineCold-rolling & galvanizinglinesSmelting furnaceBasic oxygen furnaceNewly builtShut downProduces high-grade, high-quality Steel sheets, including electrical Steel sheetsAnnounced in Nov.

10 2019, installation in the 1sthalf of FY2022 New EAF at Hirohata, Setouchi WorksProduction of quality products, such as third-generation advanced high-tensile Steel sheets (980 MPa and more) and Interstitial Free Steel (for deep-drawing processing for vehicle exterior panels) is EAF at AM/NS Calvert, USAA nnounced in Dec. 2020, installation in the 1sthalf of FY2023 Pig iron, internal scrap and processed scrap are used to produce high-grade Steel for the moment 2021 Nippon Steel CORPORATION All Rights of high-grade Steel manufacturing technology in a large EAFC hallengeProduction of high-grade Steel in large-scale EAFS crap100% hydrogen direct reduction processDRIL arge scale EAFC arbon-free powerSince Steel scrap has already been reduced, there is little CO2emissions associated with the recycling process resulting in low route: approx.