Steel and Petrochemical Industries: "CCUS Implementation Has Limits for Individual Companies... Urgent Need for Government Policy Support"

National Assembly Hosts CCUS Policy Forum
"Support Needed in R&D, Legislation, and Finance"
"A Critical Time to Design Large-Scale Projects"
Ministry of Environment and Energy: "Comprehensive CCUS Master Plan in Progress"

At the policy forum on "Paradigm Shift and Growth of National Key Industries through CCUS" held at the National Assembly Members' Office Building on the 16th, the attendees are taking a commemorative photo. 2026.3.16 Photo by Heejong Kang

The steel and petrochemical industries, which are among the most difficult to reduce greenhouse gas emissions, emphasized the urgent need for consistent government policies and support for carbon capture, utilization, and storage (CCUS) technology in order to achieve carbon neutrality.

At the policy forum on "Paradigm Shift and Growth of National Backbone Industries through CCUS," held at the National Assembly on the 16th and organized by the Korea CCUS Promotion Group and the Korea Institute of Geoscience and Mineral Resources, Nam Jeongim, Director of Climate, Environment, and Safety at the Korea Iron & Steel Association, explained, "Even if the steel industry transitions to hydrogen-based reduction steelmaking and electric arc furnaces using scrap, it is impossible to reduce greenhouse gas emissions to zero." She added, "The role of CCUS is essential for the steel industry's carbon neutrality by 2050."

She further stressed that, in order to mitigate risks associated with the industrialization of CCUS technology and greenhouse gas reduction, government-level financial and institutional support is required in the fields of research and development (R&D), legislation, taxation and policy, as well as international cooperation.

Baek Jieun, Head of the Climate and Energy Division at the Korea Petrochemical Industry Association, also stated, "Emission sources such as naphtha cracking (NCC) furnaces are areas where emission reductions are limited when relying solely on energy efficiency improvements or fuel conversion." She emphasized, "Considering these process characteristics, CCUS needs to be reviewed as one of the mid- to long-term reduction measures in the petrochemical industry."

Baek further explained, "Due to structural constraints, CCUS is not something that can be advanced solely by the efforts of individual companies; both industry and government must work together to establish the foundation." She outlined the need for building CCUS clusters based on industrial complexes, national-level carbon dioxide transportation and storage infrastructure, policy support for securing economic feasibility, improvements to regulations and systems at the demonstration and commercialization stages, and concurrent policies to create a CCU market.

Lee Hoseop, Head of the Korea CCUS Promotion Group, commented, "CCUS projects are necessary to reduce carbon emissions and ensure business continuity in hard-to-abate industries such as oil refining, petrochemicals, and steel." He added, "Through domestic and international CCUS projects, it is also possible to foster new growth businesses such as engineering, procurement, and construction (EPC) and the construction of liquefied CO2 carriers."

The steel industry emits approximately 100 million tons of greenhouse gases annually, accounting for 35% of industrial sector emissions and about 14% of South Korea's total emissions. As of 2024, the petrochemical industry is responsible for 7.7% of the country's total greenhouse gas emissions and about 18.7% of industrial sector emissions.

According to Wood Mackenzie, a global consulting firm in the energy sector, the global carbon capture market is expected to grow threefold, from 74 million tons in 2025 to 221 million tons in 2030. Wood Mackenzie also projected that global investment in CCUS will reach 250 billion dollars (about 374 trillion won) between 2025 and 2035. Of this, the hydrogen sector is expected to account for 27%, the power sector for 20%, and industrial sectors such as steel, cement, and petrochemicals for 20%.

Jung Yoonsik, Principal Researcher at Wood Mackenzie, predicted, "Initially, investments in carbon capture will be centered on energy sectors such as power generation, but the share of industrial sectors will gradually increase."

Unlike overseas, the domestic CCUS industry is still in its infancy. Currently, it is applied only on a small scale in coal power generation and blue hydrogen production. Even if carbon dioxide is captured, there is nowhere to store it. The government had promoted a CCS project using the Donghae gas field, but withdrew the preliminary feasibility study due to lack of economic viability.

According to the government’s National Greenhouse Gas Reduction Target, reductions through CCUS should reach 11.2 million tons by 2035, but so far, no results have been achieved. Experts point out that large-scale demonstration projects are necessary to advance the domestic CCUS industry.

Lee Hoseop explained, "Currently, the only domestic storage capacity is at the Donghae gas field (12 million tons)," and added, "To achieve the national greenhouse gas reduction target, it is necessary to secure at least 1 billion tons of domestic storage capacity."

It was also pointed out that, in order to secure storage sites, at least 7 to 10 years are required from identifying promising structures to actual injection, so proactive action is needed. Kwon Ikgyun, President of the Korea Institute of Geoscience and Mineral Resources, emphasized, "CCUS is expected to become economically viable before 2040," and stated, "Now is the time to design large-scale projects."

Officials from the Ministry of Science and ICT, the Ministry of Trade, Industry and Energy, and the Ministry of Environment and Energy attended the forum to introduce the government's support policies.

Ji Eunhwan, Director of the Nuclear Fusion Energy and Environment Technology Division at the Ministry of Science and ICT, stated, "To overcome economic limitations, we are promoting a CCU megaproject targeting industries with high greenhouse gas emissions."

Kang Eungu, Director of the Industrial Environment Division at the Ministry of Trade, Industry and Energy, said, "Given South Korea's geological conditions, there is a high likelihood that storage potential is limited, so it is necessary to consider various options such as developing domestic storage sites, utilizing overseas storage, and promoting international cooperation."

Kwon Hyuncheol, Director of the Climate and Energy Industry Division at the Ministry of Environment and Energy, stated, "We are establishing a comprehensive CCUS master plan to systematically foster the entire CCUS industrial ecosystem," and added, "We will actively seek ways to design rational incentives for carbon reduction achievements and expand financial and tax support for initial equipment investments."

Meanwhile, the forum was hosted at the National Assembly by Assembly members Lee Jaegwan, Park Jeong, Lee Eonju, Choi Minhee, Kim Woni, Kim Jooyoung, Kim Hyun, Jang Cheolmin, Kwak Sangun, Kim Taeseon, Kwon Hyangyeop, Park Jihye, Park Haecheol, Oh Sehee, Jeong Jinuk, and Hwang Jeonga.

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