POSCO gears up for carbon-free steelmaking with hydrogen

POHANG, North Gyeongsang Province – POSCO, the world’s seventh-largest steelmaker, is set to significantly reduce emissions in the production process by switching to hydrogen to achieve its goal of carbon neutrality.

POSCO on Monday unveiled a pilot facility, which produces steel using only hydrogen instead of fossil fuel, for the first time. The process, so-called hydrogen reduction (HyREX) steelmaking, can dramatically reduce carbon emissions, according to the POSCO Holdings Inc. unit. 

The facility, which manufactures up to 24 tons of molten iron a day, emits only 400 kilograms of carbon per ton, much lower than the emissions from the steelmaking process using fossil fuels such as coal and natural gas.

The steelmaking unit of South Korea’s No. 5 conglomerate POSCO Holdings Inc. said the facility will be carbon free once it uses renewable energy.

“The HyREX is expected to become the No. 1 new economic national treasure, which will change 3,000 years of steel history,” said POSCO Senior Vice President Bae Jin-Chan, head of the HyREX project. “Carbon neutrality is not a barrier but an opportunity for the steel sector.”

The industry is a major contributor to carbon dioxide emissions as fossil fuels such as coal and natural gas react chemically with iron ore, generating carbon dioxide. Hydrogen is the only alternative to cut emissions, as it generates only water.

HYREX

POSCO on April 15 succeeded in producing molten iron from the HyREX pilot facility at its Pohang Steel Works. The facility was currently under repair to improve post-process quality and develop additional technologies.

“The analysis of steel initially produced showed the quality of the post-processes, such as the specific gravity of carbon, missed our standards,” said a senior POSCO official. “It is still encouraging that we achieved more than 90% of the original plan, although it is insufficient.”

To produce steel, iron ore needs to go through two processes – the reduction reaction to remove oxygen from the ore to make pure iron and then the melting reaction to manufacture molten iron to change shape. In the conventional steelmaking process, a blast furnace, which uses coal, handles both the reduction reaction and the melting reaction, generating massive amounts of carbon dioxide.

Under the HyREX process, the reduction reaction, which uses hydrogen, and the melting reaction occur in a reduction furnace and an electric smelting furnace, respectively, not in a blast furnace. That reduces carbon dioxide emissions. POSCO is the only steelmaker in the world to integrate four reduction furnaces and electric smelting furnaces.

“POSCO significantly cut the production process of hydrogen reduction steelmaking and costs through process innovation,” said Bae. “We are confident that HyREX will become the global standard.”

COSTS, POWER SUPPLY

POSCO plans to break ground on a full-scale hydrogen reduction steelmaking facility with an hourly production capacity of 36 tons in the first quarter of next year with a target completion of 2027 and commercialization by 2030.

The company is poised to increase research staff and engineers for the technology as it aims to produce 2.5 million tons of steel by 2040 and all products only with hydrogen by 2050.

The key issues for the target are costs and power supply.

POSCO said the hydrogen reduction steelmaking costs are more than 30% higher than those of the existing production. No matter how much carbon the company cuts for steel production, few customers will be able to afford such higher costs, industry sources said.

Cutting steelmaking costs requires lower hydrogen production expenses with new technology and renewable energy, POSCO said. The company plans to reduce production costs through process innovation and economy of scale.

Power supply is also a concern. Electricity demand is expected to surge if POSCO operates electric furnaces for hydrogen reduction steelmaking at its steelworks in Pohang and Gwangyang, South Jeolla Province.

POSCO plans to discuss with the government how to reflect such power demand into the country’s electricity supply plan since it is difficult for an individual company to solve the issue by itself.

“The government needs to actively support the private sector on carbon emission issues since it is not a single company problem but a global trade issue,” said an industry source.

By Sang Hoon Sung

uphoon@hanhyung.com

 
Jongwoo Cheon edited this article.