Europe Invests Billions in Battery Recycling to Fuel EV Revolution

By Felicity Bradstock - Sep 12, 2024

• Several European countries are investing heavily in battery recycling plants to meet the growing demand for electric vehicles and recover critical minerals.
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• Companies like Librec, SK, and Cylib are leading the way with innovative recycling technologies and large-scale facilities.
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• The battery recycling industry is expected to grow significantly in the coming years, supporting the transition to a sustainable, circular economy.
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Automakers, big and small, are investing heavily in the development of a wide range of electric vehicle (EV) models, as consumer interest in cleaner cars increases. Europe is expected to lead the world in EV uptake, as several countries introduce laws banning the sale of new internal combustion engine (ICE) vehicles starting next decade. However, with larger numbers of EVs, significantly more lithium-ion batteries are being produced and discarded as they reach the end of their lives. This means that governments and battery producers across the globe are searching for ways to recycle these batteries, to access and reuse the critical minerals stored within them. This has led to the development of a large battery recycling plant project pipeline across the region. 

Until recently, there was little talk of battery recycling as the EV industry was still in its nascent stage. However, as EV uptake increases, governments and automakers are investing heavily in the development of new battery recycling plants. Disposing of EV batteries would not only mean creating more waste, at a time when governments are looking to reduce waste, but it also means throwing away critical minerals that are vital to the green transition. 

EV batteries are produced using a range of critical minerals, such as lithium nickel, cobalt, manganese and graphite, which are accessed via mining activities. These minerals are vital for powering a green transition, used in a wide range of green energy and clean tech projects. However, there is a finite supply of these critical minerals. Further, there are not currently thought to be enough mineral mining operations worldwide to meet the rising demand. This means that accessing and reusing critical minerals through recycling practices could be key to a shift away from ICE vehicles to EVs. This realisation has led several countries across Europe to invest heavily in the development of their battery recycling facilities.

In Switzerland, the battery recycling company Librec is constructing the country’s first major EV battery recycling plant in the municipality of Biberist. Built on the site of a former paper factory, Librec plans to open its 12,000-tonne per year battery recycling facility at the end of October. Librec has installed discharge technology to remove the remaining energy from EV batteries to help power operations, expected to contribute to around a third of the facility’s energy needs. 

In the Netherlands, the battery manufacturer SK recently opened a 10,000-square-metre battery recycling plant in Rotterdam. The company hopes to eventually expand the facility to 40,000 square metres. It is equipped to process up to 10,000 tonnes of batteries per year, which could double upon expansion. It uses a crushing and vacuum drying process to safely recycle lithium and EV batteries. This means that critical minerals are extracted to feed back into the battery supply chain. SK has also opened a recycling facility in Yancheng, China and has plans to open a plant in Newcastle, Australia by the end of the year. 

Meanwhile, in Germany, Cylib, a startup backed by Porsche, is developing a giant $200-million battery recycling plant in the state of North Rhine-Westphalia. The plant will cover almost 22,000 square metres and is expected to be the largest end-to-end lithium-ion battery recycling facility in Europe, according to Cylib. It will be capable of recycling around 30,000 tonnes of batteries each year, which makes it larger than the major existing plants. The company employs a water-based lithium and graphite recovery technique to repurpose materials from end-of-life batteries. 

The startup raised €55 million this year from a range of investors, including venture capital firm World Fund, Porsche Ventures, Bosch, and DeepTech & Climate Fonds. If successful, Cylib hopes to develop several more battery recycling plants in Germany and other European locations within the next few years. The company’s CEO Lilian Schwich stated, “Cylib reaching industrial scale production will be a key driver in building a robust European battery infrastructure.” Schwich added, “Battery recycling is pioneering the circular economy, proving that economic success is compatible with reduced environmental impact,” she added.

Earlier this year, Poland also announced a new battery recycling plant. Elemental Strategic Metals and Ascend Elements’ AE Elemental facility in Zawiercie, Poland, will be equipped to process 12,000 tonnes of batteries a year, from around 28,000 EVs. The two companies plan to launch a second joint venture in Germany in 2026, capable of recycling up to 25,000 tonnes of batteries a year, or around 58,000 EV batteries. 

Several European countries are rapidly developing their EV battery recycling capacity, with the uptake of clean vehicles expected to soar in the coming years. Battery recycling is expected to be a vital activity in the green transition, as companies look to recover and repurpose finite minerals to support the production of more EVs. While the industry is relatively small at present, it is expected to continue growing in line with the expansion of the EV industry, both in Europe and elsewhere.  

By Felicity Bradstock for Oilprice.com 

Petrostates Push Back Against UN Talks on Shift from Fossil Fuels

By Tsvetana Paraskova - Sep 13, 2024

Several major oil-producing countries, including Saudi Arabia and Russia, are pushing back against talks on an agreement at the upcoming COP29 climate summit to mitigate the use of fossil fuels, negotiators from Western countries told the Financial Times.

The group of oil-rich nations, which include Saudi Arabia, Russia, and Bolivia, are hindering efforts for talks on the phase down of fossil fuels. COP29 will be held in November in Azerbaijan, which is highly dependent on oil and gas sales for its economic growth. 

The previous climate summit, COP28, which ran one day into extra time amid heated debates on the future of fossil fuel use and production, ended with a compromise text referencing for the first time a call to all parties to transition away from fossil fuels.

The summit host, the United Arab Emirates, which is also one of OPEC’s top producers and exporters, hailed “the UAE consensus” as a historic deal to reduce emissions. 

The final text adopted by the countries references for the first time in such summit declarations an explicit call for transitioning away from fossil fuels.

But the final agreement was watered down compared to any references to phasing out or phasing down of fossil fuels, as objections from many oil exporting countries – led by Saudi Arabia – held back talks in the final days and sent the conference into overtime.  

The Conference of the Parties “Further recognizes the need for deep, rapid and sustained reductions in greenhouse gas emissions in line with 1.5 °C pathways and calls on Parties to contribute to the following global efforts, in a nationally determined manner, taking into account the Paris Agreement and their different national circumstances, pathways and approaches,” reads the text adopted last year. 

Saudi Arabia and its state oil giant Aramco have repeatedly said that the focus of the energy sector and the debates should be on how to cut emissions, not on reducing oil and gas production.   

By Tsvetana Paraskova for Oilprice.com

 

Australia Unveils $50 Billion Plan to Lead Global Green Hydrogen Market

By Tsvetana Paraskova - Sep 13, 2024

Australia looks to develop domestic green hydrogen industry and export clean hydrogen in a bid to become a global hydrogen leader, the government of one of the world’s top LNG exporters said on Friday. 

The Australian government today published its new National Hydrogen Strategy, which identifies objectives and actions to take and underpin delivery of Australia’s hydrogen industry at scale. 

The key to the government’s plan is funding through an estimated US$5.4 billion (AUS$8 billion) allocation made in this year’s Federal Budget. 

The funding will support the green Hydrogen Production Tax Incentive program, and the expanded green Hydrogen Headstart program, the government said. 

Australia plans to invest as much as US$15 billion (AUS$22.7 billion) over the next decade to become a renewable energy superpower and boost its domestic critical minerals economy, the Labor Government said in May this year.

With the new hydrogen strategy unveiled today, the government expects the incentives to unlock US$33.6 billion (AUS$50 billion) in private sector investment in the clean hydrogen industry. Under the plan, Australia’s annual domestic production capacity is expected to exceed 1 million tons of green hydrogen by 2030. It anticipates possible annual production targets of 15 million tons by 2050, supported by five-yearly milestones. 

The government says that Australia is already well placed to become a world leader in green hydrogen, with the International Energy Agency (IEA) estimating more than 20% of announced hydrogen projects globally are in Australia. 

“As our industry scales, it will provide further and greater benefit for communities, support broader economic growth and provide a key lever for Australia to reach net zero,” said Chris Bowen, Minister for Climate Change and Energy. 

“It sends a clear signal to trading partners about the future marketplace in Australia for hydrogen and hydrogen-based fuels. We’re already seeing the benefits of this through expanded trading agreements with key partners such as Germany.”  

By Tsvetana Paraskova for Oilprice.com

The Spectrum of Hydrogen

By: GenH2 Staff

Why a Colorless Gas is a Rainbow of Colors

It is becoming abundantly clear that the 2020s are expected to be a transformative decade for climate actions. These green movements, which include the profound restructuring of energy taxation in Europe, the push for a clean energy economy in the US, and increased renewable energy and energy efficiency targets across the globe, will all advance the deployment of clean hydrogen. It is also becoming abundantly clear that hydrogen will be a major part of that push for a clean energy economy. Understanding the spectrum of hydrogen colors is important to the clean energy economy and its full deployment. But what makes hydrogen clean or green in the hydrogen spectrum?

Most hydrogen gas that is already widely used as an industrial chemical is either “brown,” if it is made through the gasification of coal or lignite; or “grey,” if it is made through steam methane reformation, which typically uses natural gas as the feedstock and produces carbon dioxide (CO2) as the by-product. The goal of moving to a cleaner energy source is to change the prism colors of hydrogen production and a “greener” hydrogen process.



For a colorless gas, it may come as a surprise that hydrogen seems to be described as multiple colors in the rainbow. Currently, the majority of the hydrogen produced for industrial use – in refineries and manufacturing plants – is the “grey” hydrogen. Because grey hydrogen principally is derived from natural gas, its production also results in large volumes of CO₂ as a by-product. “Blue” hydrogen on the other hand is also made using natural gas but allows for the separation and capture of CO2, decreasing the carbon footprint of this kind of hydrogen production. Presently there is a cost of changing the prism colors of hydrogen. Blue hydrogen is at least half the cost of green hydrogen production, but the market also suggests that creating more environmentally friendly blue hydrogen would require a capital investment in capturing all that CO₂ and disposing it off in some manner – such as deep underground, or using it in some beneficial manner – such as in advanced oil recovery. Both options would make blue hydrogen cleaner than its darker shades, but still not emission-free and on the green hydrogen spectrum.

Currently green hydrogen is usually produced via electrolysis – the process of separating water into hydrogen and oxygen. Green hydrogen is currently seen as the better hydrogen choice because it is emission-free, leaving nothing but oxygen as a by-product. This eco-friendly color involves an electric current produced by renewable electricity that is used to separate water into oxygen and hydrogen, using electrolysis. Electrolysis employs an electric current to split water into hydrogen and oxygen in an electrolyzer. Green hydrogen has previously been very expensive due to high costs of supply chain logistics and electrolyzers, but the declining cost of renewable energy and other incentives are contributing to a significant growing interest in green hydrogen on the color prism.

Adding to the renewable energy choices, GenH2 is including other innovative approaches to the company’s portfolio options for green hydrogen liquefaction, as hydrogen needs are expected to increase, and projected costs are expected to decrease in the next several years. Companies like GenH2 stand out for creating advancements in complete liquid hydrogen infrastructure solutions in hydrogen liquefaction, controlled storage of liquefied hydrogen and distribution.

August 13, 2021/by GenH2 Staff

UK Government Acquires National Grid's Electricity System Operator

By City A.M - Sep 14, 2024,

• National Grid has agreed to sell its Electricity System Operator (ESO) to the UK government for £630m.
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• The ESO will transition to public ownership and become the National Energy System Operator (NESO) on 1 October.
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• The NESO will play a crucial role in ensuring UK energy security, supporting the transition to net zero, and minimizing consumer bills.

National Grid has struck a deal to sell its Electricity System Operator (ESO) to the government for £630m, paving the way for the division to transition into public ownership.

The FTSE 100 utility said on Friday that it expected the transaction to be completed on 1 October, when the government and regulator Ofgem aim to establish the National Energy System Operator (NESO).

National Grid’s ESO operates the control room that balances power supply and demand in real time. Its sale comes after the passage of the Energy Act in October 2023, which will enable the ESO to become a public corporation that will act as the UK’s independent system operator and planner.

The government has said the NESO will “play a vital role in supporting the UK’s energy security, transition to net zero and minimising customers’ bills”.

The corporation is due to be chaired by Paul Golby, the former chief executive of E.ON UK.

National Grid said the final value of the sale of its ESO would be subject to “customary closing adjustments”.

The company operates energy networks on both sides of the Atlantic and earns the majority of its revenue from regulated settlements levied on energy bills.

Energy Secretary Ed Miliband said on Friday: “Today marks a milestone for Britain’s energy system as we bring the system operator into public ownership to provide impartial, whole-system expertise on building a network that is fit for the future.

“The new National Energy System Operator has a huge role to play in delivering our mission to make Britain a clean energy superpower.

“This is another step forward by a government in a hurry to deliver for the British people.”

John Pettigrew, National Grid’s CEO, commented: “We look forward to working together with NESO to continue to drive the UK’s energy transition forward at pace; accelerating the decarbonisation of the energy system for the digital, electrified economies of the future.”

In May, National Grid announced a £7bn capital raise as part of efforts to double its capital spending over the five years to March 2029, ultimately expected to amount to £60bn.

The announcement came alongside a set of full-year results in which the firm declared operating profit dipped eight per cent to £4.5bn, which it attributed to “non-cash exceptional charges.”

By CityAM 

Brazil and Chile Lead Latin America’s Green Energy Revolution

By Felicity Bradstock - Sep 14, 2024, 

• Brazil and Chile are leading Latin America's green energy transition, with renewable energy sources contributing significantly to their energy mix.
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• Both countries have implemented policies and initiatives to support the growth of renewable energy and reduce their reliance on fossil fuels.
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• Challenges remain, such as ensuring the reliability of renewable energy and developing transmission infrastructure.
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While Latin America and the Caribbean have shown the slowest growth in terms of energy transition in the last decade, Brazil and Chile performed extremely well, ranking in the top 20 performers worldwide, according to the World Economic Forum’s 2024 Fostering Effective Energy Transition Report. Both Latin American countries now have a diverse energy mix, with renewable sources contributing significantly to their energy demand. Further growth is expected to be seen in the coming years as both countries continue to develop their renewable energy capacity, with Brazil focusing on a gradual shift away from oil and gas production and Chile supporting the cleantech industry through lithium production. 

Brazil and Chile have approached the energy transition differently but have several overlapping achievements. They both sought to enhance energy security by investing in a diverse mix of energy sources, increase the share of renewable energy, introduce carbon pricing mechanisms, and establish regulatory environments to support an energy transition. 

The report showed that Brazil doubled down on its commitment to hydropower and biofuels to boost its renewable energy capacity, as well as introducing new wind and solar energy capacity. Renewable energy now contributes nearly half of Brazil’s energy demand. As the current president of the G20, Brazil is also supporting efforts to decarbonise hard-to-abate sectors through the Industrial Deep Decarbonization Initiative. Meanwhile, Chile has increased its renewable energy capacity significantly in recent years, with solar and wind power now contributing around 35 percent of the country’s energy demand. Chile’s clean energy agenda has helped drive projects forward, aimed at achieving carbon neutrality by 2050. 

Policy Supporting Brazil’s Transition 

This September, the Senate voted in favour of the fuel of the future (combustível do futuro) bill, which is expected to help accelerate Brazil’s green transition. The bill establishes national programmes for green diesel, sustainable aviation fuel (SAF), and biomethane, aimed at decarbonising hard-to-abate industries. Estimates suggest that the programme could help boost the annual demand for liquid biofuels by an additional 11.7Bl and biomethane by an extra 3.4Bm3, according to the consultancy firm Oliver Wyman. This could lead to an additional $10.4 billion of investment in the sector. 

In March, the government also approved the Paten energy transition programme, which will provide funds from tax and other credits owed to companies by the federal government. The programme will include funding for companies investing in green energy and clean tech. One of the main priorities of the programme will be the expansion of the production and transmission of solar, wind, biomass, biogas, natural gas, and hydroelectric plants of up to 50MW. 

In August, the government voted in favour of a new legal framework for low-carbon hydrogen in Brazil, establishing the National Low-Carbon Hydrogen Policy. It also saw the launch of the Brazilian Hydrogen Certification System and the Special Incentive Regime for Low-Carbon Hydrogen Production (Rehidro), a tax regime designed to encourage technological and industrial development. This is expected to support the deployment of production facilities for low-carbon hydrogen, renewable hydrogen, and green hydrogen. 

Chile’s Transition and Challenges 

In Chile, the government has accelerated the energy transition through the establishment of a stable regulatory framework, the promotion of public-private partnerships, and strong climate policies. In addition to conventional renewable energy sources, Chile has committed to developing its non-traditional green energy sources. 

Chile plans to develop its longest power transmission line to further accelerate its green transition. The line will transport up to 3,000 MW of electricity between the northern province of Antofagasta and the capital city Santiago. Despite rapidly increasing its green energy capacity, Chile’s transmission infrastructure has lagged in recent years. The Kimal-Lo Aguirre transmission project is expected to help connect more renewable energy projects to the grid. 

Chile still faces challenges in establishing greater stability in its renewable energy mix, as it experiences an unequal distribution of clean energy throughout the day. This forces Chile to continue relying on fossil fuels during the hours that renewable energy is not being produced. Ana Lía Rojas, the Executive Director of the Chilean Association of Renewable Energy and Storage (ACERA), explained, “In Chile, we have a very high contribution of renewable energies during “solar hours” due to the large number of solar parks.” Rojas added, “The issue we must address is how to distribute this high percentage of renewable penetration in the rest of the hours of the day.” 

One way in which Chile will tackle the power reliability issues is by developing its utility-scale battery storage capacity. In May, three utility-scale battery energy storage projects were announced, to be co-located with solar plants. Chile is now set to become the second-largest battery market in the Americas, after the U.S. In 2023, Chile opened 12 storage projects, with a total capacity of 1.3 GW. It currently has 85 energy storage projects, totalling 6.4 GW, in various stages of development. 

By Felicity Bradstock for Oilprice.com 

Nippon Steel bid for US Steel faces Sept. 23 review deadline

Reuters | September 13, 2024 | 

Credit: US Steel

A powerful US national security panel reviewing Nippon Steel’s $14.9 billion bid for US Steel faces a Sept. 23 deadline to recommend whether the White House should block the deal, two people familiar with the matter said.


The Committee on Foreign Investment in the United States has until that day to complete its second 90-day review of the Japanese company’s proposed takeover of US Steel, the people said, declining to be named because the matter was not public.

On that date, CFIUS officials could grant a request by the companies to extend the review another 90 days, which would defer the politically sensitive decision until after the Nov. 5 election.

If the panel does not do that, it could approve the deal, possibly with measures to address national security concerns, or it could recommend President Joe Biden block it.

The deal has become a political hot potato and faces high-profile opponents including Biden, Democratic presidential candidate and Vice President Kamala Harris and Republican Donald Trump. They oppose foreign ownership of US Steel, which produces a strategically and symbolically important commodity used to build ships, trains and infrastructure.

“The president’s position is that it is vital for US Steel to remain an American steel company that is domestically owned and operated,” White House adviser Saloni Sharma said.

US Steel is headquartered in Pennsylvania, a crucial swing state in the presidential election. The United Steel Workers union, which endorsed Harris, opposes the deal.

As the clock ticks down to the Sept. 23 deadline, the politics and uncertainty surrounding the deal are in the spotlight. The companies have sought to save the acquisition after the panel said it would harm the security of US steel supplies in an Aug. 31 letter seen by Reuters.

The companies countered in a 100-page letter, also exclusively reported by Reuters, the deal would increase US steel output and asked for an extension to address concerns.

CFIUS and Nippon Steel declined to comment and US Steel did not respond to a request for comment.

A decision is not expected in the coming days, according to a senior administration official. The Washington Post reported on Friday a decision could be postponed until after the election.

Sources said the companies hope recent support for the deal, including a letter from business groups like the Chamber of Commerce raising concerns the transaction is being influenced by political pressure, could turn the tide.

Robust CFIUS reviews take 90 days but it is common for companies to withdraw their filings and resubmit them to give the companies more time to address the panel’s concerns. This resets the 90-day clock.

Nippon Steel and US Steel filed for the review in March, and CFIUS allowed them refile in June, starting a second 90-day clock that runs out on Sept. 23, sources said.

(By Alexandra Alper, Echo Wang, Karen Freifeld, Jeff Mason, David Shepardson and John Geddie; Editing by Cynthia Osterman)

Nippon Steel's Investment Could Revitalize U.S. Steel Industry

By Metal Miner - Sep 12, 2024,

Nippon Steel's proposed acquisition of U.S. Steel has been stalled for nine months due to national security concerns and opposition from labor unions.

The deal could potentially revitalize U.S. Steel through modernization and increased efficiency, but also raises concerns about job security and foreign ownership.

If the deal falls through, U.S. Steel may face limited options, including a potential acquisition by Cleveland-Cliffs or continued struggles to compete with international rivals.


Due to numerous obstacles, Nippon Steel’s $14.9 billion proposed acquisition of U.S. Steel has been on hold for nine months. The agreement is currently under investigation from all angles, with heavy resistance from steel industry labor unions and politicians. For manufacturers and procurement specialists involved in the metal supply chain, comprehending the details of this purchase is crucial.
Why is the Deal Facing Roadblocks?

The main barrier to the accord is worries about national security. U.S. Steel provides essential commodities to the automotive, construction and defense industries. And because United States’ infrastructure depends heavily on steel. Therefore, any transfer of ownership to a foreign company—even one as friendly as Japan—raises concerns about the nation’s dependence on foreign suppliers of crucial resources.?

To further complicate matters, labor unions, particularly the United Steelworkers (USW), have vocally opposed the Nippon Steel takeover. The USW instead continues to back Cleveland-Cliffs’ rival offer, which also targets U.S. Steel. American workers consider Cleveland-Cliffs a safer option because it is a local producer with strong union ties. The union is especially worried about how foreign ownership could affect collective bargaining agreements and job security.

Arguments for Letting the Deal Proceed

Despite the opposition, there are also strong arguments supporting the agreement, as it could potentially benefit U.S. Steel and the greater steel industry. Nippon Steel’s commitment to heavily investing in modernizing U.S. Steel’s outdated mills could offer the business a crucial technological boost. With these cutting-edge production techniques, U.S. Steel could reduce production costs, improve operational efficiency and compete more effectively with major international players like India’s Tata Steel and China’s Baowu Steel.

Furthermore, many steel industry observers think worries about foreign ownership are exaggerated because Japan is a significant ally of the United States. They claim that Japan has a long history of investing in the American economy, especially in fields like technology and the automotive industry.

By contributing financial resources and technological know-how, Nippon Steel might contribute to job security and maintain U.S. Steel’s competitiveness in the worldwide market.

For manufacturers and procurement professionals tracking steel prices and supply chains, the deal’s outcome could significantly impact domestic steel pricing. Increased investment from Nippon Steel could mean higher production capacity and a more efficient supply chain, which could ultimately stabilize prices for critical metal products.
The Path Forward: Uncertainty Looms for the Steel Industry

As of September 2024, the acquisition remains uncertain. Many expect President Biden to comment soon, and the CFIUS has yet to issue a final decision. If the deal is blocked, U.S. Steel may face limited options. Cleveland-Cliffs remains interested in buying U.S. Steel, but antitrust concerns would likely arise due to the potential concentration of steel production in a single company.

In the meantime, U.S. Steel continues to invest in its mini-mill operations, such as the Big River Steel plant, which shows promise for future technological advancements and increased production. However, the firm may struggle to compete with international rivals without significant investments in its aging facilities.
Implications for the Metal Supply Chain

For procurement professionals and industry watchers, the ongoing Nippon Steel buyout saga highlights how global steel market dynamics can significantly impact domestic pricing and supply chains. Whether the deal proceeds or not, the decision will likely have long-term implications for the U.S. steel industry.

A Nippon Steel acquisition could bring needed modernization and efficiency to U.S. Steel, while a blocked deal could open the door to further consolidation with Cleveland-Cliffs. With MetalMiner’s help, steel sourcing companies can prepare for supply chain disruptions or price volatility. See the MetalMiner metal catalog to see if your steel forms and gauges are covered by MetalMiner’s price forecasting.

By the Metal Miner Team

Japan, US face ‘shared challenge’ from China steel, PM hopeful says

September 14, 2024 
By Reuters

Japan's former Environment Minister Shinjiro Koizumi, a candidate in Japan's ruling Liberal Democratic Party's prime minister election, speaks during a debate in Tokyo on Sept. 14, 2024, where he urged the U.S. and Japan to cooperate to compete against Chinese steel.

TOKYO —

Japan and the United States should avoid confrontation about the steel industry and work together amid competition from China, the world's top steelmaker, leading prime ministerial candidate Shinjiro Koizumi said Saturday.

Sources told Reuters Friday that a powerful U.S. national security panel reviewing Nippon Steel's $14.9 billion bid for U.S. Steel faces a September 23 deadline to recommend whether the White House should block the deal.

Koizumi, Japan's former environment minister, said at a debate Saturday that Japan and the U.S. should not confront each other when it comes to the steel industry but to face together the “shared challenge” coming from China's steel industry.

"If China, producing cheap steel without renewable or clean energy, floods the global market, it will most adversely affect us, the democratic countries playing by fair market rules," Koizumi said.

Nippon Steel's key negotiator on the deal, Vice Chairman Takahiro Mori, said last month that his company and other Japanese steelmakers were urging Tokyo to consider curbing cheap steel imports coming from China to protect the local market.

On Sunday, Nippon Steel and U.S. Steel sent a letter to U.S. President Joe Biden about their deal, as Biden, Democratic presidential nominee Kamala Harris and Republican presidential nominee Donald Trump have all opposed the merger.

"We are also in the midst of elections, just like the U.S., and during elections, various ideas may arise. Overreacting to each of these would, in my view, call into question diplomatic judgment," Koizumi said when asked about the deal.

Sanae Takaichi, Japan's minister in charge of economic security and another prime ministerial candidate, also defended the deal during the same debate attended by eight other Liberal Democratic Party's, or LDP, leadership contenders Saturday.

"It appears they are using CFIUS to frame this as an economic security issue," she said, referring to the Committee on Foreign Investment in the United States. "However, Japan and the U.S. are allies, and the steel industry is about strengthening our combined resilience."

The 43-year-old son of former Prime Minister Junichiro Koizumi, the junior Koizumi, is seen as a leading contender in the September 27 race to pick the LDP's new leader, who will become the next prime minister due to the party's control of parliament.

Koizumi said Saturday that he would seek a dialog with the North Korean leadership to resolve the issue over the abduction of Japanese citizens kidnapped by North Korean agents in the 1970s and 1980s. The purported primary goal was to train North Korean agents to impersonate Japanese people.

"We want to explore new opportunities for dialog between people of the same generation, without being bound by conventional approaches, and without preconditions," Koizumi said.

After admitting in 2002 that it had abducted 13 Japanese, North Korea apologized and allowed five to return home. It said eight others had died and denied that an additional four entered its territory. It promised to reinvestigate but has never announced the results.

Japan says North Korea has refused to send the others home because of concern that they might reveal inconvenient information about the country.