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Think Tank Urges Early Commercialization of Hydrogen Reduction Steelmaking


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A recent report by nonprofit think tank Next highlights the need for Korea’s steel industry to adopt hydrogen reduction ironmaking methods to meet its greenhouse gas reduction target and limit global temperature rise. The report emphasizes the importance of reducing carbon emissions while maintaining the industry’s competitiveness. To achieve this, the plan suggests specific reduction targets and proposes an accelerated expansion of hydrogen reduction ironmaking capacity. This article explores the key findings and recommendations outlined in the think tank report.


Korean Steel Industry’s Carbon Neutrality Challenge:

The report indicates that the Korean steel industry, as per the government’s carbon neutrality scenario for 2050, may fall short of the 1.5-degree Celsius pathway proposed by the International Energy Agency (IEA). The study aims to outline a feasible reduction plan that brings the industry closer to the 1.5-degree pathway while ensuring its competitiveness in the face of carbon emission regulations.

Think Tank Report: Korean Steel Industry Requires 10 Million Tons of Hydrogen-Reduced Steel by 2040 for Carbon Neutrality

Reduction Targets and Carbon Neutralization Strategy:

The proposed plan targets a reduction of greenhouse gas emissions from direct and indirect sources by 19% in 2030, 53% in 2040, and 95% in 2050, compared to 2018 levels. It introduces a comprehensive strategy for carbon neutralization within the steel sector, addressing the cost of carbon reduction for the first time in Korea.


Urgency to Expand Hydrogen Reduction Ironmaking Capacity:

While POSCO, a major steelmaker, plans to build a hydrogen reduction ironmaking plant by 2033, the report stresses the need for earlier and more substantial expansion of such capacity. It recommends specific targets, including 3.5 million tons in 2035, 12.5 million tons in 2040, and 36.5 million tons in 2050, to maintain competitiveness and align with international carbon emission regulations and hydrogen market dynamics.


Importance of Early Commercialization and Net-Zero Processes:

The report suggests that the Korean steel industry should aim to commercialize hydrogen reduction steelmaking as early as possible and adopt net-zero processes to minimize carbon emissions. Utilizing alternative reducing agents and increasing the proportion of steel scrap in blast furnaces can significantly reduce carbon emission intensity by 2030. However, product price adjustments or government support may be necessary to incentivize the introduction of net-zero processes due to potential cost increases.


Addressing Market Pressures and International Carbon Policies:

With the implementation of Europe’s Carbon Border Adjustment Mechanism (CBAM) and the United States considering a similar carbon border tax, the Korean steel industry faces increasing pressure to reduce emissions. To ensure economic incentives for net-zero processes, the report suggests reflecting the difference between the cost of carbon reduction and the price of carbon credits in product prices or providing adequate government subsidies.



The Next think tank report emphasizes the urgency for the Korean steel industry to adopt hydrogen reduction ironmaking methods and implement net-zero processes to achieve carbon neutrality. Swift action, collaboration among stakeholders, and aligning with international carbon emission standards are essential for maintaining competitiveness and avoiding a decline in the industry’s brand power.

The report calls for concerted efforts from Korean steelmakers, steel-consuming companies, and the government to embrace the era of net-zero steel as soon as possible.


Muhammad Arshad
Muhammad Arshad
Mr Arshad is is an experienced journalist who currently holds the position of Deputy Editor (Editorial) at The Think Tank Journal.

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