Steel GX designated as K-GX signature project

Low-carbon steel needs 'green premium market,' group says

Southeast cluster to launch first, expand to southwest

An exterior view of Posco Center [Posco Holdings]
An exterior view of Posco Center [Posco Holdings]

Posco Group on Wednesday unveiled a plan to build a decarbonized industrial ecosystem centered on steel green transformation at a government event on Korea's Green Transformation strategy, known as K-GX, presided over by the president. The group said it will use its homegrown hydrogen reduction steelmaking technology to construct a pilot facility with an annual capacity of 300,000 metric tons by 2028, and will develop a steel decarbonization cluster linking a clean hydrogen supply chain to industrial complexes in Pohang and Ulsan.

The K-GX strategy is a national initiative aimed at achieving carbon neutrality and economic growth simultaneously, pursuing a green transition across industries under three directions: new-growth-engine GX, GX for all, and sustainable GX. Posco Group said steel GX must be approached as an "industrial ecosystem" in which clean energy, technology, markets and policy are organically connected — going beyond the efforts of any single company.

To that end, Posco Group plans to build such an ecosystem — spanning clean energy supply through to the use of low-carbon steel — in cooperation with the government, centering on its proprietary hydrogen reduction steelmaking technology HyREX. Hydrogen reduction steelmaking replaces coal, which is used as a reducing agent in steel production, with hydrogen, thereby cutting carbon emissions. The group said it will pursue technology development and demonstration in stages as it continues its transition to a low-carbon operating model.

Posco Group said stable and cost-effective clean energy supply at the right time is essential, given that hydrogen reduction steelmaking processes run continuously around the clock. It added that large-scale power and clean hydrogen must be secured before a genuine process transition and a successful steel GX can be achieved.

The group also identified the creation of a "green premium market" — where the value of low-carbon steel is properly recognized and rewarded — as a key challenge. It said a complete decarbonization ecosystem can only be built when policy support measures such as low-carbon steel standardization and green procurement promotion legislation are implemented in tandem.

To advance this, Posco Group proposed a public-private cooperation framework it calls "TIMUP," covering Technology, Installation, Market, Utility and Policy. Under the arrangement, companies would handle innovative technology development and facility conversion, while the government supports clean energy supply infrastructure, low-carbon market development and broader infrastructure buildout.

Posco Group also identified a southeast cluster centered on Pohang as the starting point for steel GX. The plan calls for constructing a HyREX pilot facility with an annual capacity of 300,000 metric tons by 2028 and developing a steel decarbonization cluster connecting a clean hydrogen supply chain to industrial complexes in Pohang and Ulsan. The group expects the southeast cluster alone to generate an economic impact of around 6 trillion won ($4.47 billion), create 14,000 jobs and achieve an additional annual carbon reduction of 560,000 metric tons.

After validating the Pohang-centered southeast cluster model — which will be the first to introduce HyREX pilot facilities — Posco Group plans to gradually expand steel GX to a southwest cluster centered on Gwangyang.

The group also said it will support the green transition of advanced strategic industries including mobility, AI data centers and robotics, contributing to the broader green transformation of South Korea's manufacturing sector.

"Steel has grown alongside Korean manufacturing for more than half a century as the rice of industry," said Lee Ju-tae, president of Posco Holdings. "Under the government's K-GX strategy, we will work in a public-private team-up to create a decarbonized industrial ecosystem grounded in low-carbon market development and affordable clean energy supply, grow together with local communities, and fulfill our role in achieving national carbon neutrality and the green transformation of manufacturing."

Meanwhile, Posco Group Chairman Jang In-hwa last month gathered all group executives at the Posco Global R&D Center in Songdo, Incheon, for the 2026 Posco Forum, themed "Seize future value on the new competitive playing field," where he called for accelerating the execution of the group's "triple core" strategy spanning steel, lithium and energy.


eyre@heraldcorp.com