WELLINGTON, Sept. 8 (Xinhua) -- New Zealand has seen major progress in its biggest ever emission reduction project and is on track to have greener steel as soon as 2026, which will eliminate 1 percent of the country's total annual emissions.

New Zealand Steel's electric arc furnace project reached a major milestone on Friday, with half of the coal being used at Glenbrook steel mill being replaced with electricity to recycle and reuse scrap steel.

The government announced a conditional partnership with New Zealand Steel in May to deliver the country's largest emission reduction project to date.

"There has been rigorous due diligence on the project, which has been a critical process before New Zealand Steel fully embarks on its journey to decarbonize its activities while maintaining onshore steel production," said Minister of Energy and Resources Megan Woods.

Production using the new furnace is expected to start as early as mid-2026, in line with agreed commissioning milestones.

Climate Change Minister James Shaw said the installation of an electric arc furnace at Glenbrook means New Zealand Steel will cut its emissions by more than 45 percent, equivalent to keeping approximately 300,000 cars off the road.

Once commissioned, the completed project will reduce Glenbrook's carbon footprint by 800,000 tons per annum, Shaw said.

The deal is being part funded by the Government Investment in Decarbonizing Industry Fund, which enables businesses of all sizes to reduce their emissions, he said.

"The project getting off the ground adds real momentum in pushing fossil fuels out of the energy system and lowering emissions through renewables and energy efficiency," Woods said.

A second large partnership deal was announced in July with Fonterra to cut coal use at its dairy factories and support a 50-percent reduction in the company's manufacturing emissions by 2030, she added. Enditem

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