South Korea’s leading steelmaker Posco said on Monday that the company will build an electric furnace at the company’s manufacturing facility in Gwangyang, South Jeolla Province, as part of the company’s low-carbon production transition.
Posco said a total of 600 billion won ($463.3 million) will be invested to build the electric furnace, which will have an annual production capacity of 2.5 million metric tons.
Construction of the electric furnace will start in January next year, and the company expects to begin full-scale operations there by 2026.
Posco said it plans to mix molten iron produced in the electric furnace with molten iron made in a blast furnace to make steel, thereby significantly reducing carbon dioxide emissions.
Posco noted the electric furnace will allow the company to immediately respond to global carbon-reduction initiatives, before the company can commercially deploy its new hydrogen-based steelmaking method.
Posco has been developing HyREX technology, a steelmaking method to manufacture molten metal by using iron ore fines and hydrogen, instead of fossil fuels.
Posco said the new steelmaking process would help the company achieve net-zero carbon by 2050.
In 2020, Posco introduced its carbon neutral strategy, becoming the first Asian steelmaker to initiate the transition toward more sustainable energy.