POSCO Holdings is partnering with the Government of the Republic of Korea under the Korea-Green Transformation (K-GX) strategy to develop a hydrogen steelmaking demonstration facility. The initiative is intended to reduce industrial emissions, strengthen domestic technology capabilities and support the competitiveness of South Korean steel exports.
K-GX Strategy Supports Industrial Decarbonization
K-GX runs from 2026 to 2035 and targets emissions-intensive sectors, including steel, petrochemicals, refining, cement, semiconductors and displays. Government materials say the strategy aims to mobilize approximately 1,000 trillion won in public and policy-backed financing, including 200 trillion won in fiscal resources and more than 790 trillion won in climate finance. Signature projects involving private-sector investment are valued at approximately 220 trillion won.
HyREX Technology Replaces Coal-Based Reduction
POSCO’s HyREX process builds on its fluidized-bed ironmaking research and FINEX technology. Conventional blast furnaces use coke to generate carbon monoxide, which removes oxygen from iron ore and releases carbon dioxide. HyREX instead uses hydrogen in the reduction process, producing water vapour. The resulting direct-reduced iron can then be melted in an electric arc furnace, offering an alternative to coke-based steelmaking.
Demonstration Facility Planned for 2028
The demonstration facility is planned for steelmaking sites in Pohang and Ulsan, with an annual capacity of 300,000 tonnes and operations targeted around 2028. The project is expected to use existing utilities and hydrogen supply chains while supporting domestic equipment manufacturing and industrial employment.
Government materials identify coordination among the Ministry of Finance and Economy, the Ministry of Climate, Energy and Environment, and five policy-finance institutions as important to implementation. Financial support is expected to help address investment risks during the demonstration phase.
Renewable Energy and Export Competitiveness
The initiative aligns with South Korea’s goal of reaching 100 gigawatts of renewable-energy capacity by 2030. Expanded renewable power, grid upgrades and storage could help provide electricity for low-emissions hydrogen production. The hydrogen steelmaking process could reduce emissions when supplied with low-carbon hydrogen and electricity, supporting national climate objectives and export competitiveness as international buyers increasingly seek lower-carbon steel.
POSCO Holdings has also set a broader target of scaling hydrogen-reduction steel capacity to 2.5 million tonnes by 2035. Progress will depend on hydrogen availability, technology performance and financing. An RMI analysis cited in the supplied material indicates hydrogen-based steel may remain more expensive than conventional blast-furnace steel, making public loans, guarantees and incentives relevant to early deployment.