POSCO accelerates low-carbon steel transition with Korea’s largest electric arc furnace

POSCO Group Chairman Chang In-hwa, left, and Prime Minister Kim Min-seok attend the completion ceremony for the group's new electric arc furnace at its steelworks in Gwangyang, South Jeolla Province, Wednesday. Courtesy of POSCO

POSCO has completed construction of Korea’s largest electric arc furnace (EAF) at its steelworks in Gwangyang, South Jeolla Province with an annual production capacity of 2.5 million tons, marking a major step in its transition toward low-carbon steel production.

The largest single EAF installation in Korea, which began construction in February 2024, is part of the company’s broader strategy to respond to tightening global decarbonization policies and rising demand for low-emission steel products. It was built with about 600 billion won ($392.6 million) in investment, with a cumulative 270,000 workers involved.

Unlike traditional blast furnace-basic oxygen furnace operations, which rely on iron ore and coking coal, the EAF uses recycled steel scrap as its primary raw material.

POSCO estimates the process can cut carbon emissions by up to 75 percent compared with the average emissions generated by its conventional blast furnace operations between 2017 and 2019.

To enhance the quality of EAF-produced steel, the company is advancing its proprietary hot metal-scrap mixing technology, which blends output from both blast furnaces and electric furnaces during refining. The approach is designed to maintain high-grade steel standards while lowering emissions.

The company aims to commercialize advanced steel products, including automotive steel sheets and electrical steel, by 2030.

“The EAF completed today is more than just an additional facility. It reflects POSCO’s commitment to tackling the global decarbonization challenge and reshaping the competitive landscape,” POSCO Group Chairman Chang In-hwa said during the completion ceremony at the site on Wednesday.

“POSCO will proactively meet growing global demand for low-carbon steel and further strengthen its position as a leading advanced materials company.”

The company has designated EAF-based premium steel as one of its eight strategic product categories and established a task force spanning research and development, production and sales to accelerate commercialization.

At the same time, it is pursuing transitional decarbonization technologies within existing operations, including hydrogen injection into blast furnaces and improved converter processes.

The newly completed EAF is expected to play a bridging role until hydrogen reduction technology reaches commercial scale. POSCO is currently advancing plans for a 300,000-ton HyREX pilot plant, with commercialization targeted by 2030. HyREX uses hydrogen to produce direct reduced iron, then melts it in an electric smelting furnace.