The 2030 target does not include its power generation operation, but the company aims to achieve carbon neutrality by 2050 including the power generation business.
Cutting carbon emissions from steelmaking is a key part of efforts to fight climate change worldwide and its peers such as Nippon Steel Corp and JFE Holdings Inc are also working on decarbonisation.
Kobe Steel plans to cut CO2 emissions from blast furnaces by using a new method combining its operation technology and the direct reduction iron (DRI) technology of its U.S. unit, Midrex Technologies Inc.
It also aims to develop a hydrogen reduction ironmaking method and consider using electric furnaces. It plans to use cleaner fuels such as ammonia at its coal-fired power plants.
Under a new three-year business plan unveiled on Tuesday, Kobe Steel aims to boost a recurring profit at its steel segment to more than 23 billion yen ($212 million) in the year to March 2024, against a 20.8 billion yen loss in the year just ended.
"With domestic demand expected to decline over the long term, we want to build a structure that can secure stable profits from crude steel production of 6.3 million tonnes, or maintain profitability from 6 million tonnes output," Kobe Steel President Mitsugu Yamaguchi told a news conference.
The company also aims to nearly double its annual profit from its power generation business in three years to around 40 billion yen by launching two thermal power stations in Kobe, western Japan.
($1 = 108.6100 yen)
(Reporting by Yuka Obayashi; Editing by Steve Orlofsky)