South Korea will invest nearly 600 million US dollars in developing a hydrogen direct reduction ironmaking demonstration project

The Ministry of Trade, Industry and Energy of South Korea announced that the country's hydrogen direct reduction demonstration project has passed the preliminary feasibility study conducted by the National Research and Development Program Review Committee. By 2030, the South Korean government will allocate 308.8 billion won (approximately 222 million US dollars) of public funds for project development. Coupled with investments from steel enterprises such as POSCO and Hyundai Steel, the total project budget will reach 814.6 billion won (approximately 586 million US dollars), supporting South Korean steel enterprises in enhancing their low-carbon competitiveness and achieving carbon neutrality.
Hydrogen direct reduction (HDR) is a breakthrough low-carbon iron-making technology that can reduce carbon emissions by more than 95% compared with traditional blast furnaces. South Korean steel enterprises have admitted that it is necessary to adopt hydrogen direct reduction to achieve carbon reduction goals, but cost is the main issue. According to data released by the Korea Iron and Steel Association, POSCO will need to invest approximately 54 trillion won (about 39 billion US dollars) to completely transform its blast furnace system into a hydrogen direct reduction system. Among them, 27 trillion won (approximately 19.5 billion US dollars) will be used to gradually shut down existing blast furnaces, and 27 trillion won will be used to build new direct reduction facilities. The total investment of South Korean steel enterprises in switching to the direct hydrogen reduction path may exceed 68.5 trillion won (approximately 49 billion US dollars).

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