POSCO Establishes Electric Furnace Plant in Gwangyang... Transition to Low-Carbon Production System

Board Approves Construction of 2.5 Million Ton Electric Furnace
Groundbreaking in January Next Year... Operation Scheduled for 2026

[Asia Economy Reporter Choi Seoyun] POSCO will invest approximately 600 billion KRW to establish an electric arc furnace at the Gwangyang Steelworks.

At the regular board meeting held on the 20th, POSCO approved a plan to build an electric arc furnace with an annual capacity of 2.5 million tons at the Gwangyang Steelworks. Construction is scheduled to begin in January 2024, with full-scale operation targeted from 2026.

POSCO decided to introduce the electric arc furnace to transition to a low-carbon production system. The plan is to commercialize hydrogen reduction steelmaking technology and, during the transition period until it replaces the existing blast furnace process, to adopt the electric arc furnace to continue carbon reduction efforts. POSCO explained, "This electric arc furnace investment is significant as it represents POSCO's first tangible achievement toward carbon neutrality."

Kim Hak-dong, Vice Chairman and CEO of POSCO Photo by POSCO

POSCO was the first Asian steel company to officially announce a carbon neutrality plan, declaring the goal of ‘2050 Carbon Neutrality.’ The company plans to gradually transition from existing production methods such as blast furnaces to a hydrogen reduction steelmaking production system. Currently, POSCO is developing the commercialization of HyREX-based technology, a POSCO-type hydrogen reduction steelmaking technology, and last year began designing a hydrogen reduction steelmaking demonstration plant.

POSCO plans to reduce CO2 emissions compared to the existing blast furnace method by applying a hot metal mixing technology that directly uses molten iron produced in the electric arc furnace or mixes it with molten iron produced in the blast furnace. By adjusting the mixing ratio, it will be possible to produce various grades of low-carbon products, allowing flexible responses to customer-specific requirements. Although there were limitations in producing high-grade steel using electric arc furnace scrap, the mixing technology is expected to enable the production of low-carbon high-grade steel products as well. Additionally, POSCO plans to improve energy efficiency by preheating and charging scrap using off-gas generated during electric arc furnace operation. A POSCO official stated, "We are also reviewing the use of renewable energy to transition to a green steel system," adding, "We will strengthen sustainable management based on a low-carbon production system."