A Japanese company’s proposed takeover of a historical American industrial giant has become a high-stakes political issue ahead of next month’s presidential election. But environmental groups are now also stepping up to express concerns about the nearly $15 billion deal that would see Japan’s Nippon Steel take over U.S. Steel, once the world’s largest steelmaker.
A number of those groups, including the Sierra Club, laid out those concerns in a letter to members of Congress this month. They explained that while most of the debate about the potential Nippon takeover has focused on national security concerns tied to a foreign-owned company — even one from a U.S. ally — taking control of major American industrial assets, there are also climate and public health concerns stemming from what they called “Nippon’s fixation on coal-dependence.”
The environmental groups’ letter targets congressional lawmakers from key Midwestern swing states where U.S. Steel has plants, including the Great Lakes Works facility in southeast Michigan.
The letter points to planned Nippon investments in at least two major U.S. Steel facilities that would “extend the industry’s toxic legacy with a $1.4 billion gamble tying U.S. Steel assets like Mon Valley Works in Pennsylvania and Gary Works in Indiana to expensive and polluting coal-based processes, all without addressing fugitive emissions of pollutants endemic to existing ironmaking facilities.”
The environmental groups call that a disturbing signal on the climate front, citing statistics that steel and ironmaking account for 11% of all human-generated carbon dioxide emissions. They also claim that Nippon’s plans fail to address fugitive emissions from those processes, including soot, that damage public health in nearby communities.
The letter says this is particularly problematic given that cleaner, more modern steel-making processes exist, and are already being used in other U.S.-based steel facilities. It argues that Nippon’s plans would tie U.S. Steel facilities to archaic production methods, both industrially and environmentally.
“These [other steelmakers’] examples demonstrate the rich industrial ecosystem in reach when companies avail themselves of innovative technologies — and federal incentives — to detach from coal, control their toxic pollution, and build out the clean energy economy,” the letter stated. “Moreover, the energy-savings from the transition away from coal promises a pathway for iron and steel facilities to become more efficient producers.”
Nippon, for its part, claims that its coal-based investments “will help make U. S. Steel’s blast furnace facilities more productive and environmentally sustainable as we seek to provide the highest-quality American-made steel products to American customers, fueled by American workers, while also securing American steel supply for the future.” The company also says that it and U.S. Steel “share a commitment to decarbonize by 2050,” but adds that “diverse methods or alternatives are necessary to overcome the challenges facing the steel industry.”
The proposed Nippon takeover has sparked opposition from both major political parties, including the presidential candidates — Democratic Vice President Kamala Harris has said U.S. Steel “should remain American-owned,” while Republican nominee former President Donald Trump has vowed to block the deal. President Joe Biden has also voiced his opposition.
But despite the political rhetoric and a number of hurdles to getting the deal accomplished, both Nippon and U.S. Steel say they remain committed to it being finalized. It’s currently under review by the Committee on Foreign Investment in the United States, which isn’t expected to make a final decision until after the November election.
