POSCO announced on June 17 that it has completed the construction of an electric arc furnace (EAF) in Gwangyang on South Korea's southern coast as part of its decarbonization strategy. The project represents POSCO's first foray into large-scale upstream steel production in over two decades since the steelmaker fired the No.5 blast furnace at the same steelworks in April 2000, as Mysteel Global reported.

With a rated capacity of 2.5 million tonnes/year, the new EAF is the largest single facility of its kind in South Korea and by using steel scrap as its primary raw material, it is expected to reduce CO2 emissions by up to 75% compared with conventional blast furnaces, according to POSCO.

At the completion ceremony held on the same day, Korea's prime minister, Kim Min-seok, praised the EAF as a milestone in the industry's eco-friendly transformation. Construction of the unit took more than two years and cost KRW 600 billion ($396.7 million), according to Korean media reports.

The facility marks an important achievement in POSCO's efforts to reduce greenhouse gas emissions and will play a key role in reducing greenhouse gas emissions before the commercialization of the company's HyRex hydrogen-reduction steelmaking technology, expected around 2030.

This is in response to the tightening carbon emission requirements both domestically and internationally, including the Phase 4 of the Emissions Trading Scheme (K-ETS) and the EU's Carbon Border Adjustment Mechanism (CBAM) taking effect this year.

The Korean steel giant is also developing another decarbonization technology which blends molten iron produced by both BFs and EAFs. The process would allow the company to maintain the quality of steel necessary for premium products like automotive and electrical steel and cut carbon emissions at the same time, according to Korean sources.

"The electric arc furnace demonstrates our commitment to addressing the global challenge of decarbonization and reshaping the future competitiveness of the steel industry," the Korea Herald quotes POSCO Group chairman, Chang In-hwa, as saying.