Why Did POSCO Gather Steelmakers from Around the World?

First International Forum on Hydrogen Reduction Steelmaking Technology Development Exchange
"Cooperation in Technology Development through Fluidized Reduction Furnace Platform"

POSCO Gwangyang Steelworks

[Asia Economy Reporter Choi Dae-yeol] Humanity began making iron using blast furnaces from the 18th century. Since then, as steelmaking technology has been refined, iron has established itself as a highly useful material. It is inexpensive to produce, has diverse applications, and is easy to recycle.

The steelmaking process involves a reduction reaction, a type of chemical reaction, where iron ore combined with oxygen undergoes reduction. This process requires a high heat output and fuel with a high carbon content. To ensure the quality of iron, impurities such as sulfur and phosphorus must be minimal, and coke is artificially produced and used for this purpose. The steelmaking method using coke is considered the beginning of modern steel technology, but its drawback is the high carbon emissions. This is why POSCO and Hyundai Steel rank first and second in domestic greenhouse gas emissions (excluding power companies).

Hydrogen reduction steelmaking is considered an alternative. It uses hydrogen as a reducing agent instead of carbon fuel, effectively reducing carbon dioxide emissions to nearly zero. This eliminates the need for blast furnaces, converters that refine molten iron from blast furnaces, and auxiliary facilities such as coke and sintering plants. For this reason, POSCO and other major global steelmakers and related research institutions view hydrogen reduction steelmaking as an innovative process that will replace traditional blast furnace steelmaking.

Having devoted early efforts to research and development, the hydrogen reduction steelmaking method has progressed more than expected. According to the steel industry, Swedish steelmaker SSAB recently completed a pilot plant producing steel slabs using this method. The Korean government and domestic steelmakers are also conducting national projects aiming to develop this technology around 2026.

In August, Swedish steel company SSAB delivered fossil fuel-free steel products for the first time from its Oxel?sund plant.

Sweden's SSAB Leads Hydrogen Reduction, Completes Pilot Plant
Domestic Efforts by POSCO and Others Aim for 2026 Development

The key issue is how much production costs can be reduced at the actual commercialization stage. The steel industry is a representative capital-intensive industry, and simply developing the technology does not immediately replace existing methods. No matter how environmentally friendly it is, if costs are high, practical application is difficult. Achieving economies of scale is also important. SSAB's pilot plant reportedly produces about 8,000 tons annually. POSCO's single blast furnace produces 5 million tons annually, so SSAB's output is less than one five-hundredth of that. SSAB aims to produce 1 million tons of steel annually around 2026.

Kim Hak-dong, CEO of POSCO, recently stated at a briefing, "In the ongoing national project, we aim to operate a 1 million ton scale demo plant (semi-commercial facility) around 2026, so we expect the commercialization timeline to be similar to Sweden's SSAB," adding, "The key will be how efficiently we can produce 3 to 4 million tons annually by 2030."

The hydrogen reduction steelmaking method is being reviewed in two ways: the shaft reduction furnace method using separately made pellets, and the fluidized reduction furnace method developed by POSCO. The pellet method, being developed mainly in Europe and China, requires grinding, sorting, and forming iron ore, which may cause pellet supply issues. Additional heat supply during the reduction process is also necessary. The fluidized reduction furnace method is based on POSCO's proprietary FINEX process and can use easily sourced lump ore without preprocessing.

Choi Jung-woo, Chairman of POSCO Group, is touring the Hydrogen Mobility+ Show venue last month.

29 Global Steelmakers and Associations Gather at International Forum
Consensus to Cooperate on Technology Development to Accelerate Commercialization

The HyIS (Hydrogen Iron & Steel Making Forum) 2021 international forum, hosted by POSCO from the 6th for three days, draws attention as the first event where major global steelmakers, related associations, and expert groups gather to review and share trends in hydrogen reduction steelmaking technology development. In May last year, POSCO proposed at the World Steel Association's Technology Committee (TECO) that joint cooperation is crucial for early commercialization of hydrogen reduction steelmaking, which was positively received and led to this forum.

The event includes 10 steelmakers such as Europe's largest steelmaker ArcelorMittal and Nippon Steel, 3 steel associations from Europe and China, 3 raw material companies including BHP and Vale, 2 hydrogen-related companies including Air Liquide, and 5 engineering firms such as SMS, totaling 29 organizations. CEO Kim said, "Blast furnace technology has evolved and become more efficient over 300 years through competition among many facilities worldwide," adding, "There was consensus that solidarity and cooperation are necessary for hydrogen reduction steelmaking technology development and that it should be developed on a fair platform."

POSCO plans to offer its existing fluidized reduction furnace-based FINEX process as a platform technology. Since the steelmaking process involves the entire series of steps from converting iron ore into iron to producing steel for industrial use, organic integration and clear role division are essential. Lee Deok-rak, head of POSCO's Technology Research Institute, said, "Hydrogen reduction steelmaking is a revolutionary technology rewriting steelmaking history, but it requires significant costs and time for development," adding, "From the perspective of humanity's common good, steelmakers cooperating and dividing roles can accelerate development."

This content was produced with the assistance of AI translation services.