Posco to invest $460 million in new electric furnace to reduce carbon footprint

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Posco to invest $460 million in new electric furnace to reduce carbon footprint

Published: 21 Feb. 2023, 14:08 Updated: 21 Feb. 2023, 17:54

Posco’s Gwangyang steel plant in South Jeolla [POSCO]

Posco will invest 600 billion won ($460 million) to build a new electric furnace in its Gwangyang steel mill in South Jeolla, in an attempt to reduce its carbon footprint.

The plan was approved during a board meeting held Monday.

The facility will have an annual production capacity of 2.5 million tons. Construction will start in January 2024, with an aim to begin production in 2026.

Posco hopes "the electric furnace will contribute to reducing carbon emissions until it completes the development of HyREX technology," it said in a statement.

HyREX technology, which the company also calls Hydrogen Reduction, is a steelmaking method to manufacture molten metal using iron ore fines and hydrogen. It uses hydrogen instead of fossil fuels and can thus dramatically reduce carbon emissions in the steelmaking process.

Posco's pilot HyREX plant is currently under construction.

Its holding company, Posco Holdings, is pushing to relocate its headquarters from Seoul to Pohang, North Gyeongsang.

The relocation plan comes with continuously rising demand from the port city and its residents who argue that the headquarters in Seoul may take resources from the Pohang, which is heavily reliant on the steel industry.

A final decision will be made on March 17 during an annual shareholder meeting.

BY SARAH CHEA [chea.sarah@joongang.co.kr]