Gwangyang City-Jeonnam Province-POSCO Join Hands for Low-Carbon Steel Industry Transition

"Investment Agreement Worth 1 Trillion Won for Establishing One Electric Furnace
Strengthening Core Industry Competitiveness... Accelerating Carbon Neutrality"

Gwangyang City and Jeonnam Province have signed a large-scale investment agreement with POSCO Co., Ltd. The purpose is to participate in the international community's movement toward carbon neutrality through the transition to a low-carbon steel industry.

On the 25th, Gwangyang City signed an investment agreement with POSCO Co., Ltd. and Jeonnam Province at the Seo Jae-pil Room in the Jeonnam Provincial Office. The signing ceremony was attended by Kim Young-rok, Governor of Jeonnam Province, Jeong In-hwa, Mayor of Gwangyang City, and Lee Dong-ryeol, Head of POSCO Gwangyang Steelworks.

On the 25th, an investment agreement was signed between POSCO Co., Ltd., Gwangyang City, and Jeonnam Province at the Seo Jae-pil Room in Jeonnam Provincial Office. The signing ceremony was attended by Kim Young-rok, Governor of Jeonnam Province; Jung In-hwa, Mayor of Gwangyang; and Lee Dong-ryeol, Head of POSCO Gwangyang Steelworks. Photo by Gwangyang City

POSCO is actively promoting the development of carbon-neutral technologies and facility investments to achieve the goals of 'decarbonization' and 'green steel' amid the global transformation of industry and energy. This strategy aims to promptly respond to global carbon regulations such as the European Union's Carbon Border Adjustment Mechanism (CBAM) and the United States' Clean Climate Act (CCA), and to proactively secure competitiveness.

According to the agreement, POSCO plans to invest 1 trillion KRW in the Gwangyang National Industrial Complex to transition to a low-carbon steel production system. To this end, POSCO will establish one large electric arc furnace, build a new scrap yard and scrap pier in preparation for increased scrap usage, and expand infrastructure including production facilities.

The electric arc furnace plant, with an annual production capacity of 2.5 million tons, will begin full operation in 2026. Infrastructure expansion such as the scrap yard, scrap pier, and production facilities will be invested in sequentially until 2030. By producing 2.5 million tons of molten steel annually using the electric arc furnace method, POSCO can reduce carbon dioxide emissions by up to approximately 3.5 million tons per year compared to the blast furnace method. In particular, by applying the hot charging technology, it will be possible to produce high-grade steel that was previously limited in the electric arc furnace method.

This is expected to lower carbon dioxide emissions compared to the blast furnace method while flexibly responding to various customer demands.

Kim Young-rok, Governor of Jeonnam Province, stated, “With this investment, POSCO will be able to reduce about 30% of its existing carbon emissions. This will undoubtedly be a great strength for Gwangyang City, which is leading carbon neutrality.” He added, “Jeonnam Province will provide full support to investment companies, as the slogan ‘OK! NOW JEONNAM’ means ‘New opportunities together with Jeonnam.’”

Jeong In-hwa, Mayor of Gwangyang City, said, “Today’s agreement enables us to establish one electric arc furnace that will serve as a bridge for POSCO’s transition to hydrogen reduction steelmaking. Now is the time for industry, academia, research, and government to unite their efforts to achieve carbon neutrality.” He added, “Gwangyang City will spare no support until the day carbon neutrality is achieved.”

Meanwhile, this year, Gwangyang City has attracted 14 companies worth approximately 2.3635 trillion KRW, including this large-scale investment agreement, and has created 918 jobs.