TOKYO, June 20 (Reuters) - Nippon Steel's ( NISTF )

proposed acquisition of U.S. Steel risks raising

decarbonisation costs for Japan's top steelmaker, an activist

shareholder group said, urging the company to address the

takeover's impact on its climate goals.

Nippon Steel ( NISTF ), the world's fourth biggest steelmaker, last

year announced a $15 billion takeover offer for U.S. Steel,

which backed the bid, but has faced resistance from a powerful

labour union and the White House.

"The potential addition of U.S. Steel's 11 blast furnaces to

Nippon Steel's ( NISTF ) operations will almost certainly increase the

cost of decarbonisation for the company," Brynn O'Brien,

executive director of the Australasian Centre for Corporate

Responsibility (ACCR), said.

ACCR, which has less than 1% of Nippon Steel's ( NISTF ) shares, has

filed shareholder proposals with two other stakeholders,

Corporate Action Japan (CAJ) and Legal & General Investment

Management (LGIM), calling on the company to improve its

decarbonisation strategy.

Not-for-profit organisation CAJ wants more information on

the company's carbon emission targets "so that investors

including ourselves can make appropriate assessments of risks,

including the total cost of decarbonisation as a whole group,"

Yasunori Takeuchi, CAJ's chief executive, said in an e-mail.

Nippon Steel ( NISTF ) holds its annual general meeting on June 21.

Nippon Steel ( NISTF ) and LGIM did not reply to Reuters requests for

comment.

Shareholder activism on climate change has gained

momentum in Japan over the past few years, but has not

necessarily led to changes in policy at companies that have

already set out emissions reduction plans.

Under plans announced in 2021, before the U.S. Steel bid,

Nippon Steel ( NISTF ) estimated that decarbonisation may cost it up to

5.5 trillion yen ($34.8 billion) in capital spending, including

research and development, by 2050, with some of the costs to be

covered by state support.

"Nippon Steel ( NISTF ) needs to consider how the acquisition impacts

its decarbonisation plans, and transparently communicate this,"

said O'Brien.

As part of the takeover proposal, Nippon Steel ( NISTF ) pledged to

spend at least $1.4 billion on technology at U.S. Steel's mills

to "produce more advanced and environmentally sustainable

steel".

To help decarbonise, Nippon Steel ( NISTF ) wants to feed hydrogen

into its coking coal-exposed blast furnaces, a process it is

testing at a steel site near Tokyo. It also plans to use carbon

capture, utilisation and storage and add more electric arc

furnaces.

($1 = 158.0800 yen)