Posco looks to lead decarbonization movement
![On Feb. 6, Posco held a groundbreaking ceremony for the establishment of an electric furnace at its Gwangyang Steelworks. [POSCO]](https://koreajoongangdaily.joins.com/data/photo/2024/05/23/001260e9-7e19-487e-a3a6-6cd04c02bbcb.jpg)
On Feb. 6, Posco held a groundbreaking ceremony for the establishment of an electric furnace at its Gwangyang Steelworks. [POSCO]
As international society’s push for decarbonization gains momentum and the demand for low carbon products rises, Posco has decided to take the lead in transitioning to a low carbon production system.
The company is set to invest approximately 600 billion won ($450 million) to build a massive electric furnace in Gwangyang, South Jeolla, with an annual production capacity of 2.5 million tons. The project is anticipated to be completed by the end of 2025 and is scheduled to be operational in 2026.
The company’s new business broke ground at a ceremony held at Gwangyang Steelworks on Feb. 6.
The occasion was attended by around 130 individuals including Kim Hak-dong, the CEO and vicechairman of Posco; Park Changhwan, the vice governor of state affairs of South Jeolla; Jeong In-hwa, the mayor of Gwangyang; Kim Taegyun, the vice chairman of South Jeolla’s provincial council; and Yeom Dong-il, the regional chief of the Korean Industrial Complex Corporation for South Jeolla.
At the ceremony, vice chairman Kim Hak-dong said, “The business landscape is experiencing rapid transformations due to climate change and new trade regulations. The establishment of the furnace will mark the beginning of Posco’s journey toward establishing a low carbon production system that will operate swiftly and with top-tier competency.”
Posco plans to manufacture products by using the molten metal produced from the electric furnace, either independently or by combining it with the output from a blast furnace.
The company also plans to utilize the exhaust gas emitted during the furnace operation process to preheat scraps, thereby increasing energy efficiency.
Posco estimates that the full operation of the new electric furnace will result in the annual reduction of approximately 3.5 million tons of carbon dioxide.
Moreover, the company will be able to manufacture high-grade steel by overcoming the limitations that existed when solely using an electric furnace, through the combination of respective outputs from the electric and blast furnaces.
This is expected to enable Posco to respond more flexibly to various levels of demands from its customers.
Furthermore, the construction project will require 160,000 days of labor, a figure that will contribute positively toward boosting employment and invigorating the local economy.
Meanwhile, steel companies worldwide are focusing on aspects such as hydrogen-based ironmaking, implementing electric furnaces, and developing carbon-reducing technologies to reach the goal of carbon neutrality.
The process entails considerable investment costs, and major nations such as those in the European Union or Japan are implementing various policies to facilitate a successful transition toward decarbonization.
Japan has enacted a Green Transformation policy and announced other policies to support the development of hydrogen-based ironmaking technology, invest in substantial facilities and expand the tax system to benefit green steel production.
Posco is actively seeking pathways for the domestic steel industry to achieve carbon neutrality while preserving its key position.
This involves expanding support for research and development and investing in facilities for low-carbon production technologies such as hydrogen-based ironmaking.
Additionally, the company is advocating for policy measures such as increased support for stable and costeffective hydrogen and power infrastructure from the government and related organizations.
Posco is committed to fulfilling its social responsibility by achieving its carbon neutrality goal by 2050.
Simultaneously, it aims to actively respond to low-carbon demands from the international community and stakeholders while securing its future competitiveness in the global market.
BY JEONG SEONWU [jeong.seonwu@joongang.co.kr]
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