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Hydrogen tie-up

Hyundai Motor, POSCO steelmaking tie-up to develop hydrogen tech

Feb 23, 2021 (Gmt+09:00)

Hyundai Motor, POSCO steelmaking tie-up to develop hydrogen tech

South Korea’s Hyundai Motor Co. and steel giant POSCO have agreed to jointly develop technology that uses hydrogen instead of coking coal to produce steel as the companies strive to achieve carbon neutrality.

The agreement is part of a deal Hyundai and POSCO reached last week to cooperate in hydrogen-related projects and jointly explore overseas business opportunities to nurture the hydrogen economy as their new growth driver.

According to the steel industry, Hyundai Motor Group Chairman Chung Euisun and POSCO CEO Choi Jeong-woo agreed on Feb. 16 to cooperate in the development of new steelmaking technology in line with a government initiative to shift to a hydrogen economy.

The new technology will allow POSCO to use hydrogen gas as a fuel and reducing agent in its blast furnaces to make steel – a process that doesn’t emit greenhouse gases such as carbon dioxide.

Under current steelmaking technology, some 0.75 ton of coking coal is required to make one ton of steel, which emits about two tons of carbon dioxide as a byproduct. For this reason, the steel industry has been known as one of the main culprits of air pollution.

To manufacture steel, POSCO will use green hydrogen that is created using renewable energy instead of fossil fuels.

Hyundai Motor Chairman Chung Euisun (2nd from left) and POSCO CEO Choi Jeong-woo (2nd from right) shake hands after signing a business tie-up.
Hyundai Motor Chairman Chung Euisun (2nd from left) and POSCO CEO Choi Jeong-woo (2nd from right) shake hands after signing a business tie-up.

CONSTRUCTION OF NEW HYDROGEN STEEL MILL

Once the new technology is fully developed, the automotive group and POSCO will gradually turn all of their steel plants into ones that only use hydrogen to make steel.

The two companies may also build a new steel mill to take full advantage of the hydrogen technology, according to industry officials.

Tougher global environmental regulations on carbon emissions are driving governments and private companies to embrace the hydrogen economy, which utilizes the use of hydrogen as a fuel for heat, hydrogen vehicles, energy storage and long-distance energy transport.

The European Union plans to introduce the Carbon Border Adjustment Mechanism this year. When the system goes into effect, a carbon tax will be imposed on imported goods whose manufacturing emits a large amount of greenhouse gas.

“Many countries across the globe are adopting emission-free policies. Steelmakers that do not comply with such measures may have to close their plants,” said an industry official.

HYDROGEN ECONOMY TO SET BUSINESS RULES

According to US consulting firm McKinsey & Co., the size of the global hydrogen economy will grow to $2.5 trillion a year by 2050.

As part of the business alliance, POSCO, Korea’s largest steelmaker, will gradually replace commercial vehicles running at its two main steel mills with 1,500 Hyundai hydrogen trucks. They will also work toward establishing hydrogen-fueling stations within POSCO’s plants.

Hyundai Motor, POSCO steelmaking tie-up to develop hydrogen tech

Hyundai Motor Chairman Chung, who took the helm of the automotive group in October of last year, has said the group’s new business focus will be on electric vehicles, hydrogen fuel cell cars and future mobility platforms.

Meanwhile, POSCO said in December that it will establish a facility that can produce 5 million tons of hydrogen by 2050 and achieve annual sales of 30 trillion won in the hydrogen business by that year.

Write to Byung-Uk Do at dodo@hankyung.com

In-Soo Nam edited this article.

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