Hyundai Motor Company and POSCO Collaborate on Steel Production with Hydrogen Instead of Coal

Input 2021.02.22 19:05 | Revision 2021.02.22 19:07

Hyundai Motor Company (005380)Group and POSCO (005490)In the process of producing automotive steel sheets, the group is developing technologies to reduce carbon dioxide emissions by using hydrogen instead of coal.

According to the steel industry on the 22nd, the’Business Agreement on Hydrogen Business Cooperation’ signed by Hyundai Motor Group and POSCO Group included the content of’cooperating with each other in the development of hydrogen reduction steel technology’. Earlier, on the 16th, Hyundai Motor Group Chairman Eui-sun Eui-sun and POSCO Group Chairman Choi Jeong-woo met at POSCO Cheongsong University in Pohang, Gyeongsangbuk-do to cooperate in hydrogen related projects.

Hydrogen reduction steel is a method of using hydrogen instead of coal as a reducing agent in the steel smelting process. Previously, 0.75 tons of coal was required to produce 1 ton of steel, and about 2 tons of carbon was produced. This is why the steel industry has relatively higher carbon emissions than other industries. However, it is expected that’zero carbon (0)’ will be possible if steel is made from’green hydrogen’ made using new Saejaeng energy.

The problem is that the cost and time to invest in the development of hydrogen reduction steel without carbon emission are significant. POSCO also announced its entry into the hydrogen business last year and set a goal to introduce hydrogen reduction steel by 2050. POSCO’s proprietary FINEX process is considered to be a technology close to hydrogen reduction steel, but 25% hydrogen and 75% carbon monoxide are used. There is a gap with 100% hydrogen.

For hydrogen reduction steel, a technology to commercialize’green hydrogen’ without carbon emission is needed. This is because if the existing by-product hydrogen or blue hydrogen is used as a reducing agent, it is difficult to regard it as completely carbon neutral as carbon is generated in the hydrogen production process. In addition, it must have not only the ability to produce green hydrogen, but also the infrastructure for storage and distribution.

Additional investment is also required for steel mill facilities. Conventionally, iron ore and coal are put in the blast furnace (blast furnace) of a steel mill and melted with high heat to make molten iron. On the other hand, the hydrogen reduction steelmaking method produces molten metal through facilities called fluidized reduction furnaces and melting furnaces. The’converter’ facility used in the process of refining molten metal will also be replaced with an electric furnace. This means that existing steel mill facilities must be renovated or newly built.

On the other hand, regulations related to carbon emissions in the steel industry are getting more advanced. Major countries such as the European Union (EU) and the United States are promoting carbon neutral policies and are considering introducing a carbon border tax. POSCO and Hyundai Motor Group Hyundai Steel (004020)Even in this competitive relationship, it is interpreted because of these backgrounds that they began to collaborate.

An official from the steel industry said, “As it is not easy for a single company to develop an accompaniment to hydrogen reduction steel, it seems that POSCO Group and Hyundai Motor Group have cooperated together.”

However, there are also observations that the degree of cooperation may be somewhat weak. Another steel industry official predicted, “Posco and Hyundai Steel have each participated in national projects for hydrogen reduction steel in order to neutralize the carbon in the domestic steel industry. Future cooperation can also be achieved at the level of participation in these projects.”