Energy
South Korea partners with POSCO for green steel demo
POSCO Holdings has joined forces with the South Korean government to develop a hydrogen-reduction steelmaking facility under the K-GX initiative.
Key points
- The K-GX strategy runs from 2026 to 2035 with significant public and private financial backing.
- The demonstration plant aims for an annual output of 300,000 tonnes by 2028 in Pohang and Ulsan.
- Hydrogen-reduction steelmaking replaces coke with hydrogen to produce water vapour instead of carbon dioxide.
What happened
POSCO Holdings has agreed to collaborate with the South Korean administration on a hydrogen-reduction steel production facility, according to Hydrogen Fuel News. This project forms a key part of the broader Korea-Green Transformation strategy, which spans the decade from 2026 through 2035. Government plans involve mobilizing roughly 1,000 trillion won via public and policy-supported channels, alongside significant private sector commitments.
The initiative targets heavy industries to lower emissions and enhance export viability in response to tightening international environmental rules, such as the European Union's carbon border adjustments. The demonstration unit is scheduled for completion around 2028 in the industrial zones of Pohang and Ulsan, targeting an annual capacity of 300,000 tonnes.
Why it matters
Traditional ironmaking uses carbon-based agents like coke in blast furnaces to strip oxygen from iron ore, releasing carbon dioxide. The new method substitutes hydrogen into the reduction phase, yielding direct-reduced iron and water vapour. POSCO intends to scale this low-emission capacity to 2.5 million tonnes by 2035, pending technology performance and financial conditions.
Independent analysis notes that hydrogen-based steel remains costlier than conventional output. To bridge this gap, the government plans to deploy targeted loans, tax incentives and financial guarantees. These measures are designed to mitigate early investment risks and support national climate objectives, including intermediate reduction goals for 2035.
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