Steel Industry, Which Spent Time on Carbon Emission Mitigation, Accelerates Carbon Reduction Efforts

Industrial Sector Emission Target Lowered to 11.4% by 2030
Steel Industry, Responsible for 40% of Carbon Emissions, 'Relieved'
Carbon Reduction Accelerates with Electric Arc Furnace and Hydrogen Reduction Steelmaking
Alternatives Include Emission Allowance Acquisition through Direct Hydrogen Production

The steel industry breathed a sigh of relief as the government eased its 2030 greenhouse gas emission targets. There are growing opinions that actively investing in renewable energy such as hydrogen to achieve 'carbon offset' is a realistic alternative.

The 2050 Carbon Neutral Green Growth Committee recently set the 2030 national greenhouse gas reduction target (NDC) for the industrial sector at 230.7 million tons. The previous plan aimed for a 14.5% reduction (37.9 million tons) compared to 2018 (260 million tons), but this target was lowered to an 11.4% reduction (29.8 million tons). Accordingly, the existing steel industry's target of a 2.3% reduction is also expected to be relaxed. A steel industry official said, "We conveyed to the government the practical difficulties regarding the timing of commercialization of reduction measures such as facility installation and technology development for carbon reduction faced by the industry, and it seems these factors were taken into account. As the carbon reduction burden on the power generation sector relatively increases, we plan to work on reducing the burden on the power generation sector through improving energy efficiency and reducing consumption in the process."

The steel industry, which emits the most greenhouse gases, is relieved by the lowered emission targets. Among industrial companies, POSCO emits the most carbon. Over the past five years (2017?2021), POSCO's average annual greenhouse gas emissions (converted to CO2) were 75,821,556 tons. The second-largest emitter is Hyundai Steel with 28,489,305 tons. Following are Samsung Electronics (14,494,447 tons), cement company Ssangyong C&E (10,609,944 tons), and S-Oil (9,774,528 tons). (Data from Rep. Im Eui-ja of the People Power Party and the Ministry of Environment) The greenhouse gas emissions of the two steel companies account for about 40% of the industrial sector emissions in 2018 (260.5 million tons). They represent 14.3% of the national total emissions (727.6 million tons).

The reason the steel industry emits so much carbon is that 'carbon reduction' using coal is essential in production. Iron ore is an oxide combined with iron and oxygen in its natural state. Therefore, to produce industrial iron, the oxygen contained in the iron ore must be removed. Currently, steel mills use carbon monoxide (CO) generated when coal is heated for this reduction reaction to separate iron. This process produces a large amount of carbon dioxide. The carbon emissions per ton of steel product reach 2.1 tons. Although research and development on hydrogen-based steelmaking is underway, commercialization is expected only after 2030.

To reduce carbon emissions, the domestic steel industry is actively introducing electric arc furnaces. The methods steel companies use to produce molten iron are broadly divided into 'blast furnace' and 'electric arc furnace.' The blast furnace produces molten iron by putting iron ore, coke, and limestone into a blast furnace, while the electric arc furnace melts scrap metal to produce molten iron. Although the quality of molten iron from electric arc furnaces is lower than that from blast furnaces due to the use of scrap, carbon emissions are reduced by up to 75%. POSCO plans to invest about 600 billion KRW to build an electric arc furnace with an annual capacity of 2.5 million tons at its Gwangyang Steelworks. Construction will start in January next year, with full operation planned for 2026.

Hyundai Steel aims to establish a carbon-neutral steel production system based on electric arc furnaces called 'Hi-Cube' by 2030. Hi-Cube is an advanced electric arc furnace that can melt not only scrap but also iron ore raw materials. It can remove impurities and add components, enabling various steelmaking processes such as thick plates, cold-rolled steel sheets, and automotive steel sheets that conventional electric arc furnaces could not handle.

Byproduct hydrogen production facility of POSCO. Photo by POSCO

The steel industry also has a method of directly producing renewable energy to obtain carbon emission credits. Since the steel industry emits a huge amount of carbon and the price of carbon emission credits continues to rise, direct production is considered more effective than purchasing carbon emission rights or credits.

Hydrogen can be a solution. Hydrogen power generation contributes to electricity supply and acquiring carbon emission credits. Hydrogen is also essential for 'hydrogen reduction steelmaking,' which produces iron by using hydrogen instead of carbon monoxide in the iron ore reduction reaction. In fact, POSCO Group plans to produce 500,000 tons of hydrogen annually by 2030 through hydrogen production projects underway domestically and internationally, using it for steelmaking and power generation. The 2050 goal is to produce 5 million tons of hydrogen annually, achieve sales of 30 trillion KRW, and capture a 30% domestic market share.

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