Applications opened on 9 November for the steel strand of Japan's subsidy for hard-to-abate industries, and close at noon on 11 December. The scheme, called Programme I (steel), pays up to one-third of eligible capital costs for two kinds of project: switching fuels at captive power and similar plant, and changing the steelmaking process itself.
What the money covers
Eligible costs are design, buildings, equipment and system integration. The rate is one-third or less in principle, and the guidelines warn that the rate granted may fall below the one applied for. Land, office buildings, demolition of existing plant, environmental assessments and ordinary equipment replacement are excluded.
The budget is about ¥117.07bn. That figure covers Programme I and the companion Programme II (chemicals, paper and pulp, cement and others) together, and includes state debt obligations running to fiscal 2030.
The tests applicants must pass
A fuel conversion must cut direct (Scope 1) emissions by at least 50% by around fiscal 2035. Qualifying plant is a captive or shared thermal power facility with at least 30,000 kW of capacity after the project, or an industrial furnace with a grant request of at least ¥4bn. LNG counts as a transition fuel, but the equipment must be built to take low-carbon fuels later if they become available: the guidelines list hydrogen, ammonia, synthetic methane and synthetic fuels.
A process conversion means moving from blast furnace or converter steelmaking to electric furnaces. Energy-related CO2 per tonne of crude steel must fall by at least 50%, and molten-steel impurities must be controllable to levels comparable with the blast-furnace route.
On emissions governance, the guidelines set two layers. For emissions up to fiscal 2025, applicants must set a 2030 Scope 1 and 2 reduction target and report and publish annual results with third-party verification; that layer is not required if the project is not carried out in fiscal 2025 or earlier. From fiscal 2026, applicants must take part in the GX Future League and report emissions there. Joining the GX League counts as meeting the earlier-period requirements, and equivalent measures can stand in for the later ones. Smaller emitters and small and medium-sized companies may submit other emissions-reduction measures instead. Reviewers will ask whether the project would fall short of an investment hurdle without subsidy. A person with authority to represent the company must attend the panel interview.
Timeline and the pre-start option
Interviews are planned for mid-January 2027 and winners are due to be named in mid-February. Grant applications follow in February, and projects must finish by 31 January 2031. Payment is normally made after completion, once the final amount is fixed.
Companies that cannot wait for approval can file a pre-start notification in the same window. If it is accepted, costs incurred from the date the secretariat sets may be recognised as eligible, provided ordering follows the subsidy's procurement rules. Acceptance does not guarantee selection, and a project that is not selected receives nothing.
The guidelines name no applicants or per-project ceiling. Projects already adopted in the fiscal 2024 and fiscal 2025 rounds cannot reapply.