The hydrogen industry, once hailed as a potential savior for a carbon-free energy future, is now facing a period of stagnation after running into barriers such as weak economic viability, infrastructure gaps, and policy uncertainty. Looking back, however, the LNG industry—now a pillar of the global energy market—also began more than 50 years ago amid intense debate over its commercial viability and serious safety concerns. By retracing LNG’s journey of overcoming adversity and ultimately reshaping the global energy landscape, we can identify strategic lessons to help today’s hydrogen industry break through its current “chasm.”

Senior Research Fellow Park Yong-sam POSCO Research Institute

LNG’s Risk-Sharing Strategy for Overcoming Asset Specificity

The LNG business requires massive capital investment across the entire value chain: extracting gas upstream, liquefying and transporting it by ship midstream, and regasifying and supplying it downstream. In addition, LNG assets have a high degree of asset specificity*, creating structural risks: sellers worry about being unable to sell their gas, while buyers fear supply disruptions. To launch such large-scale projects, both sides need a strong financial safety net. LNG has therefore grown by distributing risk through take-or-pay contracts and sophisticated financial and contractual structures.

*Asset specificity: The characteristic of an asset designed for use in a specific transaction or purpose, resulting in significant loss of value if it is converted to another use

“Pay Even If You Don’t Take the Gas”: Sharing Risk Through Take-or-Pay Contracts

Introduced in the late 1960s, take-or-pay provisions became the backbone of the LNG business. Under these provisions, buyers are required to pay for a predetermined minimum volume each year, regardless of whether they actually take delivery of the gas. This enabled sellers to secure stable annual cash flow. Banks used these long-term contracts as collateral to provide project financing*, allowing LNG projects to lower their borrowing costs by more than 170 basis points and achieve economic viability. In addition, long-term contracts lasting 20 to 25 years tied suppliers and buyers together in close partnerships, serving as a strong safeguard against market volatility.

*Project financing: A financing method that raises funds based on a project’s future cash flows and its own assets, rather than the creditworthiness or collateral of the sponsoring company

■ Neither Too High nor Too Low: Oil Indexing and the S-Curve

Because there was no established gas market in the early days of LNG, gas prices were linked to those of competing fuels, particularly oil. The benchmark used was the JCC (Japan Customs-cleared Crude Price)*, which represents the average price of crude oil imported into Japan. If oil prices rose or fell too sharply, one party to the contract could face bankruptcy. To prevent this, the industry introduced an S-curve formula that moderated fluctuations in gas prices and created a safeguard for mutual benefit.

*JCC (Japan Customs-cleared Crude Price): A representative benchmark used to link the prices of long-term LNG contracts in East Asia to oil prices

■ Evolving from Rigid Rules to Flexible Trading

In its early days, the LNG market operated under a highly restrictive point-to-point model, earning it the nickname “floating pipeline.” Gas could not be sold anywhere other than the designated destination. However, as the number of market participants grew and infrastructure expanded after the 1990s, short-term contracts of two to three years and spot-market trading became increasingly active. As a result, when major crises struck—including the 2011 Fukushima nuclear accident and the 2022 Russia-Ukraine war—countries around the world were able to exchange gas flexibly and overcome the resulting challenges.

The Weapon Beyond Technology and Capital: Social Acceptance

The final hurdle to commercializing LNG was not technology or financing, but public perception—in other words, social acceptance. The key to LNG’s success was transforming the question, “Why should we use LNG when it is expensive and dangerous?” into a broader national aspiration.

■ Breaking Through the Early Dilemma with Oil Shocks and Environmental Regulations

In its early days, LNG was over 30% more expensive than coal or oil. Moreover, methane (CH₄), its main component, has a global warming potential 25 to 30 times greater than that of carbon dioxide. This led to criticism that LNG was only “partially clean”—that leaks during production or transportation could cause even greater environmental damage. Since the market was already accustomed to coal and oil, private companies had little reason to choose LNG voluntarily.

▲ Long lines of cars at a gas station in Maryland, U.S., following the oil shock on June 15, 1979 (Photo source: Wikimedia Commons)

The 1973 oil shock and environmental regulations changed this trajectory. As oil prices soared, governments around the world began encouraging LNG adoption through subsidies and tax incentives as part of their efforts to strengthen energy security. In addition, as the International Maritime Organization (IMO) tightened regulations on sulfur oxide emissions from ships, LNG began attracting attention not only as a fuel for power generation but also as a marine fuel. Building on this momentum, the LNG industry successfully positioned LNG as “a bridge from coal to renewable energy” and secured policy support from governments.

■ Securing Social Acceptance Through Government Guarantees and Environmental Campaigns

Strong government guarantees also played a critical role. The governments of the United Kingdom and France regarded LNG not simply as a fuel, but as a strategic asset that could contribute to national energy security. By directly guaranteeing long-term purchases, they created an environment in which banks could lend with confidence. When the Brunei LNG project was launched in 1969, Mitsubishi Corporation of Japan was able to invest several times its capital contribution largely because of the extensive support and guarantees provided by government-backed financial institutions, including the Export-Import Bank of Japan (JEXIM) and trade insurance provided by Japan’s Ministry of International Trade and Industry.

▲ Tokyo Gas’s Negishi LNG Terminal in Yokohama, Japan (Photo source: Wikimedia Commons)

Tokyo Gas’s “Clean Air” campaign in 1969 also played a significant role. Through the campaign, Tokyo Gas presented LNG to residents suffering from severe air pollution and smog not simply as “a new fuel,” but as the solution to restoring Tokyo’s blue skies. By working with the city government to promote LNG as a public-private initiative to combat pollution, Tokyo Gas helped residents overcome their vague concerns and embrace LNG with confidence.

■ Hydrogen Needs a New Identity

Like LNG before it, the hydrogen industry today must establish an identity that gives it social legitimacy. Hydrogen should be presented not simply as a new fuel, but as a strategic asset for responding to Europe’s Carbon Border Adjustment Mechanism (CBAM) and a means of contributing to the transition to a low-carbon economy.

A phased strategy is also needed: first, gradually securing economic viability through blue hydrogen—produced by reforming natural gas supplied as LNG, with carbon capture, utilization and storage (CCUS)—using existing facilities, and then exploring the long-term transition to renewable energy-based hydrogen. Just as LNG helped resource-poor countries such as Korea and Japan strengthen their energy self-sufficiency in the past, expanding the hydrogen supply chain can contribute to national energy security. This value must be communicated widely.

LNG was once considered “madness” from an engineering perspective, a “reckless challenge” economically, and a “dangerous provocation” socially. Yet it overcame technological barriers through materials innovation, eased financing constraints through long-term contracts, and overcame operational limitations through standardization.

Viewed against LNG’s 70-year journey, the temporary stagnation facing the hydrogen industry today is not a retreat, but a preparation phase for a full-scale breakthrough. If the industry identifies bottlenecks across the hydrogen value chain, develops the necessary technologies, and builds a robust global partnership network, it can become a market leader when the hydrogen market fully takes off.

Senior Research Fellow Park Yong-sam POSCO Research Institute

LNG: A Revolution in Cryogenic Materials That Made the Impossible Possible

■ The ‘Magic of Cryogenics’ and the Cleveland Tragedy

The idea of liquefying natural gas at -162°C and reducing its volume to one six-hundredth was once regarded in the early 20th century as nothing more than the theoretical ‘magic of cryogenics.’ At the time, engineers had succeeded in turning gas into liquid, but the development of cost-effective materials capable of safely containing that liquid remained a major challenge.

The roots of the LNG industry date back to 19th-century physicists’ experiments in gas compression and liquefaction. In 1941, the world’s first commercial LNG peak-shaving storage facility was built in Cleveland, Ohio. It introduced an innovative business model: storing gas in liquid form to prepare for winter heating demand surges, then regasifying it for supply when needed.

▲ The scene of the East Ohio Gas Company explosion in Cleveland in 1944 (Photo source: Cleveland Memory, http://www.clevelandmemory.org)

However, the early LNG industry soon faced a devastating disaster due to material limitations: the Cleveland tragedy of 1944. The cause can be traced back to wartime material shortages in 1941. Because stainless steel was unavailable, 3.5% nickel alloy steel was used instead in the storage tank construction. When the tank was filled with LNG at -162°C, the material lost its toughness—the ability to absorb impact—and underwent low-temperature embrittlement, becoming as brittle as glass.

Eventually, the tank seams ruptured, and the leaked gas triggered a massive explosion that killed 131 people and devastated the surrounding area. The blast was equivalent to 2.43 kilotons of TNT, roughly one-sixth the power of the Hiroshima atomic bomb. In the aftermath, LNG became synonymous with fear in the public mind, and the industry entered a deep two-decade dark age.

▲ A view of POSCO International’s Gwangyang No. 1 LNG Terminal

During this period, researchers relentlessly searched for materials that would not crack under cryogenic conditions. Their efforts led to the development of 9% nickel steel and 5083 aluminum alloy, both of which resist brittle fracture even at -196°C. In particular, 9% nickel steel has since become the global standard for the inner walls of onshore LNG storage tanks. This era also saw the establishment of modern safety management systems, including mandatory installation of dikes capable of containing more than 100% of tank capacity.

LNG Crosses the Sea: The Era of Marine Transportation and the Battle for Standards

Before the 1950s, natural gas produced from oil fields was routinely burned off on site through flaring because there was no practical means of transportation. To solve this problem, the Methane Pioneer, a converted cargo ship, made the world’s first attempt at seaborne LNG transport in 1959. Its insulation method was primitive—aluminum tanks wrapped in South American balsa wood—but its successful 27-day Atlantic crossing silenced skeptics who had claimed that transporting gas by sea was impossible, and marked the beginning of LNG’s global expansion.

■ Moss vs. Membrane: The Standards Battle and Korea’s Winning Move in Shipbuilding

As the LNG shipping market expanded, two containment systems competed to become the industry standard. One was Norway’s Moss-type system, which places giant spherical tanks on top of the hull. The other was the membrane-type system developed by France’s GTT*, which applies a thin special metallic membrane directly to the inner hull. *GTT (Gaztransport & Technigaz): A leading French engineering company holding the core source technology for LNG carrier membrane systems

The Moss-type system offered outstanding structural safety and was highly resistant to sloshing—the movement of liquid cargo—but suffered from poor space efficiency, causing shipbuilding costs to rise sharply as vessel size increased. The membrane-type system, by contrast, offered 10–15% better space utilization than Moss, allowing carriers to transport significantly larger volumes in a single voyage. However, it was more vulnerable to inner wall damage caused by sloshing.

▲ Mozah, the world’s first 266,000㎥ LNG carrier built by Samsung Heavy Industries in 2008 (Source: Samsung Heavy Industries Blog)

It was Korea that found a way through this challenge. Korean shipbuilders effectively overcame the membrane system’s critical weakness—sloshing—through advanced engineering design. Having focused on large-scale vessel technologies since the 1990s, they succeeded in the mid-to-late 2000s in building Q-Max LNG carriers with a capacity of 266,000㎥, realizing economies of scale. This dramatically lowered transportation costs per unit, and today more than 80% of LNG carriers worldwide use the membrane system led by Korea.

Beyond innovation in the vessels themselves, so-called ‘joker card’ technologies have recently made remarkable progress in overcoming energy security concerns and infrastructure constraints. One such example is the FSRU (Floating Storage and Regasification Unit), which stores LNG offshore, regasifies it, and then supplies it to land. Because FSRUs can be built faster and at lower cost than onshore terminals, they have emerged as critical assets for energy security. In fact, when pipeline gas (PNG) supplies were disrupted by the Russia-Ukraine war in 2022, the Netherlands and Germany deployed FSRUs in just six months, enabling them to overcome an unprecedented energy crisis.

Lessons from LNG History: The Key to the Hydrogen Era

The LNG industry’s history of challenge and resilience provides a critical milestone for those preparing for the coming hydrogen economy. Hydrogen is drawing attention as a future low-carbon energy source, but its successful adoption will require thorough preparation—taking LNG’s path as a lesson.

① Securing High-Value-Added Specialty Steel Technologies to Overcome Hydrogen Embrittlement

▲ Inside Tank No. 7 at Gwangyang LNG Terminal 2, built with POSCO’s independently developed high-manganese steel

Hydrogen presents a uniquely difficult challenge: not only is its liquefaction temperature far lower than LNG’s at -253°C, but its tiny atomic size allows it to penetrate metal lattices and cause cracking, a phenomenon known as hydrogen embrittlement. This is a major technical barrier for the steel industry, but also an opportunity to secure market leadership. R&D investment in hydrogen-dedicated specialty alloys such as high-manganese steel, as well as in high-pressure and embrittlement-resistant steel technologies, should not be viewed simply as a cost but as an essential investment for survival.

② Building a ‘Flexible Standardization Alliance’ Across Related Industries

Just as LNG standardization was made possible through close cooperation between shipbuilding and steelmaking, the hydrogen era cannot be unlocked through standalone technology development alone.

A standards alliance should be formed across the entire value chain—from the development of hydrogen-dedicated specialty steel to the construction of hydrogen carriers (for ammonia, liquefied hydrogen, LOHC*, etc.) and the operation of global hydrogen terminals—to secure leadership in the global market.

*LOHC (Liquid Organic Hydrogen Carriers): Liquid compounds suitable for storing and transporting hydrogen

③ Introducing an ‘FSRU Model’ and ‘Integrated Energy Management’ to Reduce Early Investment Risks

In the early stage of the hydrogen economy, large-scale infrastructure development carries significant stranded-asset risks. To minimize these risks, it will be necessary to actively adopt a ‘hydrogen FSRU model’ that either extracts hydrogen from ammonia onboard or directly supplies liquefied hydrogen at sea. In addition, just as LNG carriers reuse boil-off gas (BOG) generated during operations as fuel, hydrogen carriers should also improve operational efficiency by establishing an integrated energy management system that reliquefies evaporated hydrogen or uses it as feedstock for fuel cells.

Like LNG, which overcame the tragedy of 1944 to become one of humanity’s core energy sources, only by ensuring rigorous safety and establishing technology standards proactively can Korea and POSCO Group secure global leadership in the coming battle for the hydrogen economy.

Senior Researcher Park Jae-bum POSCO Research Institute

The Hot Topic of Humanoid Robots! Why Are All-Solid-State Batteries Attracting Attention?

At ‘CES 2026’, held with great enthusiasm earlier this year, the most talked-about topic was humanoid robots. Immediately following the exhibition, interest in humanoid robots surged, leading to a significant rise in the stock prices of robot-related companies. Humanoid robots are designed to perform dangerous or complex tasks in place of humans in workplaces requiring high-intensity labor. Their potential for application across various fields, from daily life to industrial sites, is garnering significant attention.

▲ The ‘next-generation electric Atlas research model’ (left) and ‘next-generation electric Atlas open model’ (right) unveiled at CES 2026. Image source: Hyundai Motor Group]

Another hot topic alongside humanoid robots is the all-solid-state battery. An all-solid-state battery is a next-generation battery that replaces the liquid electrolyte, a core material of lithium-ion batteries, with a solid electrolyte. Thanks to the use of a solid electrolyte, it possesses high safety, and based on this, it allows for the improvement of other materials, enabling an increase in the battery’s energy density. In other words, it is one of the suitable battery candidates that meets the energy density and safety requirements demanded by humanoid robots.

Robots, especially humanoids, have limited space for battery installation. Unlike electric vehicles (EVs), it is difficult to mount a large amount of batteries, which limits battery capacity. Therefore, batteries with high energy density per weight and volume are essential for robots. Additionally, since robots must be able to lift heavy objects and perform quick movements instantaneously, high power output is also expected to be a critical factor in battery performance. While all-solid-state batteries are evaluated as capable of meeting these requirements in the future, they are still in the pre-commercialization stage and are currently very expensive.

However, when looking at the proportion of the battery in the total cost, there is a clear difference between EVs and robots. Unlike EVs, where the battery cost accounts for a relatively high portion, the price proportion of the battery in robots is relatively low. Therefore, even if an all-solid-state battery is installed, the price increase for the robot is smaller than that for an EV. For this reason, humanoid robots are being discussed as a promising initial application field once all-solid-state batteries are commercialized.

Between Expectation and Reality… Barriers That All-Solid-State Batteries Must Overcome

Despite these technical advantages and high market expectations, it is difficult for all-solid-state batteries to lead to immediate commercialization in the short term. Even setting aside the problems to be solved in the mass production process, the barrier of high cost still exists.

Assuming the commercialization price of a humanoid robot is $5,000 per unit, even if the battery is switched from a ternary NCM (nickel, cobalt, manganese) battery to an LFP battery, the price reduction for the robot is only about 1.9%. In other words, because robots use a small amount of batteries per unit, it is difficult to expect the same cost-saving effect as in EVs by using LFP. What if an all-solid-state battery is applied? It is estimated that the robot price would increase by about 14–17%, and the cost proportion of the battery would rise to the 20–24% level.

Although it varies depending on the characteristics and use of the robot, the industry considers a battery cost share of around 10% to be appropriate for humanoid robots. This is because, in addition to the battery—the heart of the humanoid—there are many other necessary parts and modules, such as actuators (joints), grippers (hands), and AI (the brain), making it difficult to allocate a large portion of the cost to the battery. Therefore, even assuming a maximum cost proportion of 15% considering the performance improvement of the robot due to the application of an all-solid-state battery, the price of all-solid-state batteries needs to drop to the $350/kWh level.

Key challenges for the commercialization of all-solid-state batteries

The main reason for the high price of all-solid-state batteries is the lack of a stable mass production system, but the high price of the core material, solid electrolyte, is also a major factor. The cost of the solid electrolyte material alone exceeds the price of a lithium-ion battery. This is because the price of lithium sulfide (Li₂S), the core raw material for solid electrolytes, remains high at about $500/kg, and because they are mainly manufactured in lab or pilot lines, the ‘economies of scale’ effect—where the average price decreases as production volume increases—has not yet occurred. For all-solid-state batteries to secure price competitiveness compared to lithium-ion batteries, the price of solid electrolytes appears to need to drop to the $30/kg level.

For commercialization, technical challenges remain in addition to price. While improving the safety of all-solid-state batteries is possible just by applying the core solid electrolyte material, improving other materials is also necessary to ultimately increase energy density. Furthermore, to improve peak output (lasting from a few seconds to tens of seconds), technical hurdles such as improving ionic conductivity and overcoming interface resistance must be resolved. Currently, major global companies are actively pursuing material-centered R&D to overcome these limitations.

Despite various issues, all-solid-state batteries are still considered a very suitable next-generation battery technology for robots. This is because they are not only safer than LFP batteries but also have significant room for improvement in energy density. This is expected to improve not only the robot’s operating time but also its peak output performance, which lasts from a few seconds to tens of seconds. Ultimately, whether the substantial improvement in robot performance—such as energy density, peak output, and safety—is clearly proven to offset the burden of increased costs due to the application of all-solid-state batteries will be the key criterion for judging future commercialization.

‘Dream Battery’ All-Solid-State Battery, Can It Accelerate the Timing of Commercialization?

All-solid-state batteries have long been called the ‘dream battery’ and have received high expectations in the secondary battery market, but they still face the challenge of securing mass-producibility and price competitiveness similar to that of lithium-ion batteries. Until now, suitable demand sources for all-solid-state batteries have been limited, but recently, the possibility that the market opening time could be advanced, defying previous expectations, has been raised.

① Before Electric Vehicles? The Potential for Robot Market Application

Among domestic battery manufacturers, Samsung SDI has presented a relatively concrete timeline for the mass production of all-solid-state batteries. The company is targeting 2027 for mass production and is reportedly reviewing the potential for application in various new fields, including robotics. If these plans materialize, all-solid-state batteries could be adopted in non-automotive sectors—such as robotics—before they are widely used in electric vehicles. In particular, because the sample testing and certification processes for robots are relatively more flexible than those for EVs, there is significant potential for the market landscape to shift rapidly.

② China’s Announcement of National Standards for All-Solid-State Batteries

Meanwhile, changes in the global policy environment are acting as a catalyst to accelerate the opening of the all-solid-state battery market. The Chinese government recently announced national standards for all-solid-state batteries, establishing clear terminology and a classification system. This is interpreted as a strategic move to secure market leadership, with a focus on next-generation applications such as robots and eVTOLs*. Major Chinese battery firms are accelerating development with a goal of commercialization around 2027; if coupled with government support, the initial cost burden is expected to be partially mitigated. These national standards and policy supports are significant, as they can accelerate market formation regardless of the current level of technical maturity. In response, Korea is also seeking policy measures, such as securing production bases for core materials and expanding R&D support for next-generation batteries.

*eVTOL (Electric Vertical Take-Off and Landing): An aircraft that uses electric power to hover, take off, and land vertically.

③ The Time Until Commercialization: The Importance of a ‘Pivot Strategy’

The price of all-solid-state batteries during the initial mass production and pilot stage in 2027 is estimated at $400–600/kWh, and a transition to full-scale commercial production is likely to occur only after 2030. However, it is expected that all-solid-state batteries will periodically emerge as a key market topic over the next three to four years, with the construction of material supply chains proceeding in parallel. In this rapidly changing environment, experts argue for the necessity of a ‘pivot strategy*.’ This means that rather than simply waiting for the all-solid-state battery market to open, companies must strengthen their existing lithium-ion battery competitiveness while simultaneously preparing to pivot quickly to all-solid-state technology as the market evolves.

*Pivot: A strategy of changing direction or focus while maintaining the existing core business.

POSCO Group Preparing for the Era of All-Solid-State Batteries

POSCO Group has been preemptively conducting research, development, and investment in core materials such as cathode materials for all-solid-state batteries, lithium-metal anodes, and solid electrolytes. To secure competitiveness in the solid electrolyte business, which is the core of all-solid-state batteries, POSCO Group invested a 40% stake in Jeong-Kwan Co., Ltd. in February 2022 to establish POSCO JK Solid Solution. The company is currently operating a pilot plant and is conducting sample tests for global battery companies and OEMs.

In addition, POSCO Group is accelerating the development of next-generation materials—such as solid electrolytes, high-capacity cathodes, and silicon anodes—through strategic partnerships and equity investments in industry leaders like Taiwan’s ProLogium and the U.S.-based Factorial Energy. Furthermore, the group is moving to internalize the production of lithium sulfide, a core raw material for sulfide-based solid electrolytes, to drive down costs and secure a more economical supply chain.

▲ Panoramic view of POSCO Future M’s Pohang cathode material plant.

Recently, POSCO Future M signed an MOU with Factorial, an all-solid-state battery company headquartered in Massachusetts, USA, for the development of all-solid-state battery technology. Through this cooperation, it is expected that POSCO Future M’s material technology and Factorial’s global partnership capabilities will be combined to secure competitiveness in the all-solid-state battery market.

As such, POSCO Group plans to continuously expand its portfolio of core materials for all-solid-state batteries, including cathode materials for all-solid-state batteries, silicon/lithium-metal anode materials, and sulfide-based solid electrolytes, centered on POSCO Future M, which possesses material design and coating technologies.

Senior Researcher Je-ho Cheong POSCO Research Institute

U.S. President Donald Trump : “I’d Like to Buy Greenland”

America’s interest in Greenland is nothing new. In 1867, U.S. Secretary of State William Seward — who orchestrated the purchase of Alaska — first explored the idea. In 1946, President Harry Truman offered Denmark $100 million in gold to buy the island.

In August 2019, when Trump declared, “I’d like to buy Greenland,” Denmark’s Prime Minister dismissed the idea as “absurd.” Later, the Trump administration floated military options and proposed tangible economic incentives to Greenlanders, fueling speculation that his ambitions might actually take shape.

Greenland’s Strategic Value in Security, Resources, and Supply Chains

Greenland is the world’s largest island, situated between North America and Europe, touching both the North Atlantic and Arctic Oceans. Covering about 2,166,000 km² — roughly ten times the size of the Korean Peninsula — it has a population of just 56,000. A Danish territory since the 18th century, Greenland declared self-rule on June 21, 2009. While Denmark retains control over defense and foreign affairs, Greenland governs its own resources, judiciary, police, and legislation.

Over 80% of Greenland is covered by ice sheets, but rapid melting due to climate change is unlocking access to untapped resources. The opening of Arctic shipping lanes has further elevated its military, security, and supply chain importance.

A Security Linchpin for U.S. Defense

Greenland serves as an “unsinkable aircraft carrier” aimed at Russia, making it a cornerstone of U.S. defense strategy. The Pituffik Space Base in northwestern Greenland is the U.S. military’s northernmost installation, equipped with early-warning radar to detect ICBM launches. Geographically, it is about 4,400 km from Moscow — roughly half the distance from U.S. mainland bases — enabling faster strike capabilities in a crisis.

Greenland also sits within the GIUK gap (Greenland–Iceland–United Kingdom), a critical maritime choke point since the Cold War that blocks Russian submarines from entering the Atlantic. Full U.S. control over Greenland would significantly strengthen its ability to contain Russian naval forces.

A Resource Powerhouse: Rare Earths to Oil

Greenland is rich in rare earth elements. The KvaneFjeld mine in the south is among the world’s largest deposits, estimated at over 10 million tons — enough to meet global demand for decades. It also contains uranium, lithium, nickel, cobalt, and other critical minerals for electric vehicle batteries. Rare earths essential for EV motors, wind turbines, and missile guidance systems — such as neodymium, praseodymium, and dysprosium — are abundant, making Greenland a prime alternative to China’s dominance in the rare earth supply chain.

The island is also believed to hold vast oil and natural gas reserves. The U.S. Geological Survey estimates the Arctic contains 13% of the world’s undiscovered oil (about 90 billion barrels) and 30% of its undiscovered natural gas. Greenland’s oil reserves alone are estimated at 31 billion barrels — comparable to U.S. shale oil reserves — with significant natural gas deposits offshore.

Gateway to the Arctic Route: A Future Logistics Hub

From a supply chain perspective, Greenland is a strategic prize. In 2018, China released its Arctic Policy White Paper, calling itself a “Near-Arctic State.” In response, the Trump administration made clear its interest in incorporating Greenland. China has since sought to invest in Greenland’s airport expansion and mining projects as part of its “Polar Silk Road” initiative, but the U.S. has pushed back hard.

For example, when Greenland’s autonomous government planned to expand three airports in 2018, China Communications Construction Company (CCCC) submitted a bid. Denmark welcomed the move, but then-U.S. Defense Secretary James Mattis objected, saying, “We cannot allow the Chinese Communist Party to build an air base in our backyard.” Under U.S. pressure, China was excluded, and the project was funded by Denmark and the U.S.

The U.S. attempt to purchase Greenland can be viewed as an Arctic‑era extension of the Monroe Doctrine*, aimed at preventing China’s growing influence in the region.

*Monroe Doctrine: A foreign policy declared by President James Monroe in his December 1823 State of the Union address. It emphasized non‑alignment, non‑colonialism, and non‑intervention, and opposed any external power’s attempts to interfere in or colonize the Americas.

Melting ice is opening the Northern Sea Route, which can cut shipping distances by 30–40% compared to the Suez Canal. The Shanghai–Rotterdam route, for instance, is about 20,000 km via the Suez Canal but only 14,000 km via the Arctic. If the Arctic route becomes fully operational, Greenland could emerge as a mega logistics hub — akin to historical Venice or modern-day Singapore.

Currently, the route runs along Russia’s coast. If the U.S. uses Greenland as a base to control the western gateway, it could secure an alternative path and counter Russian influence.

Could Greenland Become Part of the US?

In a January 8 interview with The New York Times, Trump said, “Ownership is very important. There are things you can’t get through leases or treaties that you can get through ownership.” When asked whether Greenland’s acquisition or NATO’s maintenance was more important, he hinted that Greenland could take priority.

For Washington, Greenland is a critical asset in countering China and Russia — militarily, economically, and logistically. Trump’s remark that “my morality comes before international law” underscored his willingness to disrupt the existing order to secure it.

While the U.S. already operates bases in Greenland under agreements with Denmark, it prefers permanent ownership over leases that could be revoked with a change in government. Greenlanders, however, insist: “We are neither Danish nor American — we are Greenlandic. We are not for sale.” They want independence from Denmark but have no desire to become America’s 51st state.

Under Greenland’s 2009 Self-Government Act, its people have the right to decide on independence. While polls show strong support for independence, the island’s heavy reliance on Danish subsidies — over 50% of its budget — makes the prospect risky. Support drops sharply when potential declines in living standards are factored in.

Recently, Trump claimed, “Negotiations have begun, and we are close to an agreement.” Analysts believe he may be shifting from outright ownership to securing broad access rights.

Experts predict that, regardless of sovereignty, the U.S. will likely expand its military and economic footprint in Greenland. If ownership proves unattainable, Washington may seek to broaden military rights through agreements with Denmark and strengthen economic influence via resource deals with Greenland’s autonomous government. Still, climate change and shifting geopolitics could quickly alter Greenland’s fate.

Recently, demand for humanoid robots in China has surged, leading to a wave of large-scale supply contracts. In response, Morgan Stanley released its Humanoid Robots 100 report, projecting that the global humanoid robots market could reach as much as USD 60 trillion within the next decade. This article examines the potential of humanoid robots as an industrial mega trend, global technology development strategies, and Korea’s approach to this emerging sector.

Senior Researcher Jeoung-Heon Woo POSCO Research Institute

Humanoid Robots in History

Humanoid robots—machines designed to resemble humans—have appeared throughout history, sometimes as loyal assistants, other times as perceived threats. Examples include the bronze giant Talos from ancient Greek and Roman mythology, the water-clock-powered automaton of China’s Han Dynasty, and Leonardo da Vinci’s “robot knight” from the Renaissance. Across ancient civilizations, human-like machines have emerged in various forms.

Interest in humanoid robots has endured for centuries, accompanied by caution over potential risks. Notably, science fiction writer Isaac Asimov introduced the Three Laws of Robotics in his 1942 short story Runaround, raising philosophical questions about the relationship between humans and machines.

The rapid advancement of AI in recent years suggests that robotics may evolve toward a humanoid robots-centered future. While a “machine” is generally defined as a tool designed to perform production activities using power, a “robot” is an intelligent machine capable of making autonomous decisions under certain conditions.

Modern humanoid robots go further, combining advanced AI with a human-like form factor—a body structure modeled on human anatomy—allowing them to learn work methods, optimize performance, and actively assist in a wide range of human activities.

Physical AI: Extending Intelligence into the Real World

The concept of Physical AI is also gaining attention. Physical AI refers to AI embedded in physical devices—such as robots or autonomous vehicles—that interact directly with the real world. Traditional AI communicated with humans through digital interfaces like text or images, but Physical AI operates in real-world environments, collaborating with humans, perceiving surroundings, and responding accordingly. At CES 2025, NVIDIA CEO Jensen Huang identified Physical AI as a major future growth driver, emphasizing NVIDIA’s role at the center of this technological shift.

ⓒ gettyimagesbank

Why the World is Paying Attention to Humanoid Robots

Humanoid robots are gaining social acceptance and technological attention for two main reasons: form factor suitability and socio-economic potential.

1. Form Factor Perspective

Robots designed for specific repetitive tasks benefit from specialized form factors. However, for Physical AI performing diverse, non-specialized actions in real-world environments, a human-like form factor is advantageous because our physical infrastructure is built for human proportions.

Door handles, stair dimensions, and control panel placements are all designed for human use. Humanoid robots can operate in these environments without costly infrastructure changes, offering high versatility. In contrast, having different standards for each form factor would be inefficient.

2. Socio-Economic Perspective

Humanoid robots’ human-like appearance enables a wide range of human-robot collaboration scenarios, extending beyond manufacturing into customer service, caregiving, education, and guidance. Recent advances in language processing, facial expression recognition, and gesture control have improved emotional engagement, signaling the evolution of robots into social entities.

However, psychological barriers remain. Masahiro Mori, Professor Emeritus at Tokyo Institute of Technology, proposed the Uncanny Valley theory, which suggests that robots that look too human can cause discomfort. This highlights the need to consider psychological acceptance and emotional distance alongside technical perfection.

Economically, humanoid robots are highly promising. Their development requires not only AI but also sensors, actuators, motion control systems, and energy supply technologies. These demands drive innovation across multiple industries, making humanoid robots development a potential growth engine for the future.

Humanoid Robots Industry Structure and Potential Players

Morgan Stanley’s February 2025 report divides the humanoid robots industry value chain into three core areas: Brain, Body, and Integrator, and identifies potential players in each.

• Brain: Combines software and hardware. Software includes AI models, data science, simulation technology, and vision software. Hardware includes memory and vision computing.
• Body: Includes actuators, components, motors, sensors, batteries, power semiconductors, analog semiconductors, aluminum casting, connectors, heat treatment, and automation systems.
• Integrator: Companies that assemble and integrate the brain and body into finished products. Potential players include Hyundai Motor, Boston Dynamics, Apple, Samsung Electronics, LG Electronics, Alibaba, Amazon, Naver, ABB, and KUKA.

The industry can also be categorized into core components and modules, finished product assembly, and service areas, with the service sector expected to see diverse business models emerge.

Global Technology Leaders: Tesla and NVIDIA and Hyundai Motor

▲ Tesla’s Optimus Gen 2 (Source:Tesla’s official YouTube channel)

The emerging humanoid robots industry is being led by Tesla and NVIDIA, each pursuing distinct strategies.

Tesla is leveraging its expertise in EV production and autonomous driving to develop Optimus, a humanoid robot intended to automate production lines. First unveiled at Tesla AI Day in 2021, Optimus has evolved to perform a variety of tasks. The 2024 Optimus 2 features 40 actuators—12 in the hands alone—allowing it to perform delicate actions such as cracking an egg. Tesla plans to enter the humanoid robots sales market in 2026.

NVIDIA, on the other hand, aims to dominate the humanoid robots “Brain” platform rather than build its own robot. Its Jetson Thor computer, based on the latest Blackwell GPU architecture, enables large-scale AI inference and vision-based decision-making directly on local devices—capabilities previously limited to server environments.

Tesla’s approach resembles Apple’s integrated hardware-software model, while NVIDIA’s strategy is akin to Android’s platform dominance.

▲ Hyundai Motor Company unveils humanoid robot “Atlas” at CES 2026(Source:Hyundai Motor Group official YouTube channel)

In addition to these global leaders, Hyundai Motor introduced its humanoid robot Atlas at CES 2026. Purpose-built for industrial and logistics operations, Atlas offers advanced mobility, precise manipulation capabilities, and seamless integration with Hyundai’s autonomous vehicle and smart factory ecosystems. The debut underscores Hyundai’s ambition to position itself as a key integrator in the humanoid robots value chain, capitalizing on its manufacturing expertise, robotics R&D, and global production footprint.

Securing Leadership in the Humanoid Robots Value Chain

Following smartphones and EVs, the world has lacked a clear driver of technological innovation—until humanoid robots emerged as the next catalyst. As a convergence of cutting-edge technologies, humanoid robots are recognized as a key area for future growth, though challenges remain in cost competitiveness and safety in human-machine collaboration.

Importantly, the humanoid robots industry’s impact will extend beyond AI and software into materials, components, and services. Development and standardization will require core components that meet both functionality and reliability, along with mass production capabilities. In the service sector, opportunities will arise in humanoid robots deployment, human-robot collaboration models, and humanoid robots training and operation.

In June 2025, the Korean government launched the K-Humanoid Robots Alliance, a national robotics and AI consortium involving over 40 domestic industry, academic, and research institutions. AI companies and experts are collaborating with universities to develop AI models for robot manufacturers, with field trials supported by demand-side companies such as POSCO Group.For example, Aei Robot has signed MOUs with POSCO E&C and HD Hyundai Mipo Shipyard to develop humanoid robots for construction sites and shipyards.

Humanoid robots have moved beyond simple robotics to become a central axis of next-generation industrial innovation. Understanding and responding strategically to the technological, industrial, and service trends surrounding their evolution is more important than ever.

Recently, as national policies have been strengthened to address the climate crisis and the transition to sustainable energy has been accelerating, the aviation industry is rapidly shifting from conventional fossil fuel-based jet fuel to sustainable aviation fuel (SAF). With Young-hoon Kim, Senior Research Fellow at the POSCO Research Institute (POSRI), we conduct an in-depth analysis of SAF as a new growth engine, changes in global market dynamics, and Korea’s strategic response as a leading jet-fuel exporter.

Senior Researcher Young-hoon Kim, POSCO Research Institute

Rapidly Expanding SAF Market

In the past, the automotive industry rose to the challenge of reducing its carbon footprint, resulting in the widespread presence of eco-friendly vehicles on today’s roads. Today, the aviation industry accounts for approximately 2-3% of global carbon emissions and, much like the automotive sector in the past, is now grappling with the challenge of reducing them. It is no exaggeration to say that the aviation sector’s sustainability increasingly hinges on SAF. SAF is a fuel developed to replace conventional jet fuel, produced from raw materials such as used cooking oil; vegetable and animal oils/fats; biomass; animal manure; waste wood; municipal solid waste; and captured carbon dioxide (CO2). It delivers performance equivalent to conventional jet fuel while reducing greenhouse-gas emissions from the production process by up to about 80%.

The first use of SAF in the aviation industry took place in 2008, but usage was negligible at the time. A major shift began in 2021, when the International Air Transport Association (IATA) adopted a resolution at its 77th Annual General Meeting to achieve net-zero carbon by 2050. Following this decision, the share of SAF in global jet fuel consumption rose steadily: 0.1% in 2022, 0.2% in 2023, and 0.3% in 2024, increasing by approximately 0.1 percentage points each year.

The global SAF market is growing rapidly as countries around the world gradually increase mandatory SAF blending requirements. By 2030, the United States, Japan, and Singapore plan to require SAF to account for 10% of total jet fuel use. The European Union (EU) has set a target of 6%, and Indonesia aims for 2.5%. Korea is also aligning with these global efforts. In August 2024, the government announced a policy that will make a 1% SAF blend mandatory for all international departing flights starting in 2027. As a result of these policy shifts, the global SAF market is expected to grow to around USD 67 billion (approximately KRW 92.4 trillion) by 2030 — roughly 30 times its current size.

If the SAF market is formed, various raw materials including biomass will be required, and there is a high possibility that the global raw material supply chain will be reorganized. Therefore, countries that possess raw materials or have strengths in raw material development are paying close attention to SAF as a new growth industry. In the past, the aviation fuel market was a monopoly and oligopoly market based on crude oil as a single raw material. However, because SAF uses various raw materials such as oils and fats, herbaceous and lignocellulosic biomass*, and industrial off-gases (CO, CO2, H2), the market has shifted to an intensely competitive one.

*Herbaceous and lignocellulosic biomass refers to trees and herbaceous plants containing cellulose, as well as products and waste derived from them. It is mainly used as a raw material for the production of biofuels, bioplastics, and biochemical substances.

U.S. Eyes SAF as a New Growth Industry

The United States is emerging as an optimal location for SAF production, leveraging its competitive advantage in producing bioethanol, a next-generation SAF raw material, from agricultural crops such as soybeans, corn, and sugarcane, as well as from agricultural byproducts. The Trump administration has also expressed interest in fostering the domestic SAF industry, pledging to maintain support under the Inflation Reduction Act (IRA).

In May 2025, the administration announced a restructuring plan to dramatically reduce or terminate clean energy tax credits. However, it maintained the Section 45Z Clean Transportation Fuel Credit for SAF, which provides up to USD 1.75 per gallon (approximately KRW 2,419) in incentives, and extended its expiration date by five years, from 2027 to 2032. In particular, while continuing to support fuels that achieve at least a 50% reduction in CO2 emissions, the U.S. framework, unlike global standardization efforts, excludes Indirect Land Use Change (ILUC)* CO2 emissions from its calculation boundary. This approach has enabled corn-based bioethanol to be included as an eligible fuel for federal support.

*Indirect Land Use Change (ILUC) refers to land-use changes that occur when farmland or pasture previously used for food or feed crops is converted to biofuel crop production, and to meet the displaced demand, forests or grasslands that had been used for other purposes are cleared and converted into cropland.

In other words, when corn in the United States is used for bioethanol, the supply of corn for food decreases, leading other countries to convert forests into cropland to meet that demand. Because corn has high ILUC emissions, it is a crop with a low CO2 reduction rate. However, in the United States, because ILUC emissions are excluded from the CO2 calculation boundary, corn’s CO2 reduction rate rises to more than 50% compared with conventional jet fuel, and it has therefore been included as an eligible fuel for support programs.

Japan Takes an Active Role in Building the SAF Market

How is Japan responding? At the U.S.–Japan summit in February 2025, Japan’s Prime Minister Shigeru Ishiba stated that securing a stable supply of resources such as bioethanol, in addition to LNG, from the United States would bring great national benefit to Japan. President Trump also noted his close relationship with the farming community and expressed strong interest in building a bilateral supply chain based on bioethanol.

Japan, leveraging the resource development capabilities of its general trading companies, is establishing a supply network for SAF raw materials such as used cooking oil, vegetable oils, and bioethanol. To encourage investment in domestic SAF production, the government provides subsidies covering between one-third and one-half of capital costs. To meet its mandate requiring 10% SAF use by 2030, Japan will need about 1.3 million tons of SAF per year. Four major refiners are currently reviewing six SAF production projects, and the government plans to cover between one-third and one-half of the investment depending on the technology. Japanese trading companies are participating as reliable raw material suppliers for SAF production in Japan through two of these projects, importing bioethanol from the United States and Brazil. As Japan’s domestic SAF production increases, they are expected to expand their role from supplying the domestic market to exporting SAF.

China and India are Transitioning from Raw Material Exporters to SAF Producers

China is shifting toward producing and exporting SAF domestically as the United States has strengthened import tariffs on Chinese used cooking oil, making it more difficult to export raw materials, and as demand for SAF has expanded mainly in the European Union (EU). One of China’s SAF producers, Zhejiang Jiaao Enprotech, has received government approval to export up to 370,000 tons of SAF and has already exported 13,400 tons this year.

India also has abundant SAF raw materials, including used cooking oil and crop residues, and it is expected that the country will be able to produce up to 24 million tons of SAF by 2030. As the domestic aviation market continues to grow rapidly, up to 10 million tons are expected to be consumed domestically, and the remainder will be directed toward exports.

POSCO Group Secures Diverse Core Raw Materials for SAF Production

Korean companies are also actively pursuing the SAF market. POSCO possesses a range of raw materials that can serve as a foundation for expanding into the SAF business, making it possible to enter the market through collaboration with refiners.

▲ POSCO International Indonesia palm plantation (left) and workers at the palm plantation. (Image Source: POSCO International)

POSCO International began developing plantations on Papua Island, Indonesia, in 2011 and started commercial palm oil production in 2016. In the palm oil refining process, various byproducts such as palm oil mill effluent and empty fruit bunches are generated, and since they are recognized as SAF raw materials, refiners’ interest is high. Sugarcane and corn, which are drawing attention as next-generation SAF raw materials, and bioethanol made by saccharifying them, can also be secured through POSCO International’s trading capabilities.

POSCO International has already laid the groundwork for growth in the eco-friendly business market, including SAF, by obtaining two international certifications in October 2024. The certifications obtained are ISCC EU*, a global certification that ensures the sustainability of biofuel production in accordance with the EU’s Renewable Energy Directive, and ISCC CORSIA**, a certification that guarantees the sustainability of aviation fuels. Through the acquisition of these international certifications, POSCO International has secured both the qualification to export biofuels and raw materials to the European market and the eligibility to supply raw materials for SAF production. This achievement is anticipated to provide substantial opportunities for growth in the EU and the international aviation industry.

*ISCC EU (International Sustainability and Carbon Certification EU) is an international certification program that verifies the sustainability of biofuels in accordance with the European Union (EU) Renewable Energy Directive.

**ISCC CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) is a program that certifies Sustainable Aviation Fuel (SAF) that meets the standards of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) established by the International Civil Aviation Organization (ICAO).

▲ POSCO Holdings, along with LG Chem, the Korea Research Institute of Chemical Technology, and Gyeongsangbuk-do, has formed the “Steel Industry CCU Consortium” and is participating in the mega project for carbon dioxide capture and utilization promoted by the Ministry of Science and ICT. The CCU Consortium proposed the Pohang Steelworks as the demonstration site and received final approval from the Ministry of Science and ICT in October 2024, aiming to start the demonstration project in 2026 after a preliminary feasibility study in 2025.

Various by-product gases are generated at POSCO’s steel mills. Among these, carbon monoxide (CO) and CO2 are regarded as next-generation SAF raw materials due to the absence of supply limitations. This technology involves producing SAF by converting CO into bioethanol and refining it into aviation fuel, or by reforming* CO2 into CO and synthesizing it with clean hydrogen. The Future Technology Research Laboratories of POSCO Holdings, in collaboration with LG Chem, plans to initiate a large-scale carbon capture and utilization (CCU) mega project in 2026, aimed at capturing CO2 and converting it into SAF raw materials. Upon successful completion of the demonstration project, POSCO is expected to enter the next-generation SAF market.

*Reforming is a technology that uses a metal catalyst to react CO2 and hydrocarbons such as methane to produce synthesis gas (a mixture of hydrogen and CO).

Preemptive Entry into the SAF Market to Seize Opportunities

So, is the transition of the aviation fuel market to SAF an opportunity or a threat for Korean companies? As Korea is the world’s leading exporter of aviation fuel, the global shift to SAF is seen more as a threat than an opportunity for Korean companies. For domestic aviation and refining industries, slowing down the speed of the transition to the SAF market may be advantageous in the short term.

ⓒ Getty Images Bank

However, since SAF is a strategic item that can change the structure of the multi-trillion-won aviation fuel market, it is important to note that major countries are recognizing it as a new industry and are actively participating in market creation. In particular, considering that the United States, Australia, Japan, Singapore, and the Netherlands, which are actively participating in SAF market creation, are Korea’s major aviation fuel export destinations, the market should be reviewed from a comprehensive perspective of defending the existing aviation fuel market and creating new SAF industries.

POSCO Group needs to review ways to participate in the SAF market in advance by utilizing POSCO International’s resource development capabilities and POSCO’s CCU technology using carbon dioxide. It is especially important to review various business models, including preemptively participating in overseas markets, which are expanding relatively quickly, beyond the domestic model, where the pace is expected to be slower.

With the International Maritime Organization (IMO) set to implement a GHG pricing mechanism in 2028, new possibilities and opportunities in LNG core materials and gas business are coming up. We take a look at how the decision to impose this shipping carbon tax could impact POSCO Group’s business, alongside insights from Ki-Yoon Jang, Senior Researcher at POSCO Research Institute.

Senior Researcher Kee-Yoon Jang, POSCO Research Institute

I Upcoming GHG Pricing Mechanism to Drive Changes in Global Shipping

The IMO has finally gone ahead with the official introduction of a shipping carbon tax (GHG pricing mechanism). Starting in 2028, all vessels over 5,000 tons will be subject to the tax. This marks the outcome of long-standing discussions aimed at cutting down on greenhouse gas emissions from maritime transport.

▲ The 83rd Marine Environment Protection Committee (MEPC 83), held by the International Maritime Organization (IMO) from April 7 to 11. (Image source: Korea Maritime Safety Authority(KOMSA))

This decision was finalized at the 83rd session of the Marine Environment Protection Committee (MEPC 83), held recently. The IMO has set out a goal for the global shipping industry to cut back carbon emissions by up to 43% compared to 2008 levels by 2035. If this target is not met, shipping companies will have to pay out a carbon tax ranging from USD 100 to as much as USD 380 per ton of CO₂ emitted. The exact amount may vary depending on vessel size, voyage distance, and emission volume, but the industry does not take this lightly.

*IMO: A specialized agency of the United Nations responsible for protecting the marine environment and ensuring safe and efficient shipping.

The global revenue expected from the GHG pricing mechanism is projected to reach USD 10 billion annually, or approximately KRW 14.25 trillion. This poses a considerable burden on the shipping industry. However, the IMO’s decision is anticipated to go beyond simple taxation, serving as a catalyst for reducing carbon emissions across the maritime sector. Some shipping companies have already begun introducing LNG-powered vessels, which emit less greenhouse gases compared to conventional ships, and are expanding the use of low-carbon fuels in a proactive effort to respond to the new regulations.

I Background of the GHG Pricing Mechanism

According to data published by the International Energy Agency (IEA) in 2022, the transportation sector accounts for 16% of global greenhouse gas emissions. Of this, maritime shipping is responsible for approximately 2%. In other words, the shipping industry accounts for approximately 2% of total global greenhouse gas emissions. This figure is by no means insignificant, especially when compared to road transport (12%) and aviation (1%). Accordingly, the role of the maritime sector in achieving global decarbonization goals has become increasingly critical.

The issue of GHG emissions from international shipping began to receive serious attention in the early 2000s. In 2003, the International Maritime Organization (IMO) initiated its first studies on GHG emissions in the maritime sector. Although the Kyoto Protocol*, which entered into force in 2005, assigned legally binding reduction targets to developed countries, the shipping sector was not directly included. Instead, responsibility for regulating maritime emissions was delegated to the IMO, leading to growing expectations for its role. Since then, the IMO has introduced energy efficiency standards for ships, implemented mandatory fuel consumption reporting systems, and actively advanced discussions on market-based measures such as carbon pricing and emissions trading schemes to address maritime carbon emissions.

In 2023, talks on introducing a GHG pricing mechanism in international shipping really picked up speed. The IMO drew up a new greenhouse gas (GHG) strategy and officially adopted the goal of achieving carbon neutrality in international shipping by 2050, thereby setting in motion the full-scale introduction of a GHG pricing mechanism. As a result, at the 83rd session of the Marine Environment Protection Committee (MEPC 83) held in April this year, it was decided that the GHG pricing mechanism would take effect in 2028. Once IMO member states agree on specific rates and application standards through further discussions, the mechanism is expected to be implemented as planned.

*Kyoto Protocol: An international agreement adopted at the 3rd Conference of the Parties (COP3) to the United Nations Framework Convention on Climate Change (UNFCCC), held in Kyoto, Japan, in 1997. It was the first legally binding treaty to set greenhouse gas (GHG) emission reduction targets for developed countries, covering gases such as carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O). The protocol entered into force in 2005. While developed countries were subject to reduction obligations, developing countries were exempt.

I Anticipated Increase in Demand for LNG-Related Core Materials Following Implementation of the GHG Pricing Mechanism

How is the implementation of the GHG pricing mechanism expected to affect the shipping industry? In particular, vessels operating on conventional marine fuels such as marine gas oil (MGO) and heavy fuel oil (HFO) are likely to experience a significant rise in operating costs. By contrast, LNG (liquefied natural gas)-powered vessels emit 20-30 percent less CO₂, making them subject to a considerably lower tax burden. As a result, demand for LNG fuel is expected to increase*, prompting shipping companies to increasingly consider LNG-fueled vessels when placing new ship orders. This shift is expected to be especially evident in long-haul routes and large vessel segments, such as container ships and oil tankers.

*Although the expansion of LNG usage may lead to increased methane (CH₄) emissions in the long term, and competition with zero-carbon fuels such as ammonia and hydrogen is inevitable, LNG is expected to maintain its position as a transitional fuel in the maritime sector through 2040.

▲ The photo above shows Gwangyang Terminal 1, completed by POSCO International in July. POSCO International is currently developing dedicated LNG bunkering infrastructure at the Gwangyang LNG terminal as part of its related business initiatives. A 12,500㎥ LNG bunkering vessel is under construction and is scheduled to begin full-scale operation in the second quarter of 2027, upon delivery. (Image Source: POSCO International)

As the number of LNG-powered vessels increases, the demand for LNG bunkering is also expected to rise. Rather than building LNG storage and refueling facilities at every port, constructing bunkering vessels that can supply LNG at sea is considered more cost-effective. Accordingly, the increase in LNG-fueled ships is likely to lead to a corresponding expansion in LNG bunkering infrastructure at ports. Major ports are expected to invest in LNG bunkering terminals or bunkering vessels, with demand projected to grow rapidly in global hub ports such as Singapore, Rotterdam, and Busan.

In addition, the demand for materials used in LNG storage and transportation is also expected to be affected. Since LNG must be stored and transported at an ultra-low temperature of -162°C, demand for cryogenic insulation materials such as vacuum insulation panels and aluminum alloys, as well as highly corrosion-resistant and heat-resistant materials, is projected to increase. Key materials used in LNG-powered vessels and bunkering applications include high-nickel steel (9% Ni steel) for cryogenic service, Invar alloy, high-manganese steel, and vacuum insulation panels.

For a standard LNG carrier with a capacity of 174,000㎥, it is estimated that approximately 1,500 to 2,000 tons of high-nickel steel, 500 to 700 tons of Invar alloy, and 10,000 to 12,000㎡ of vacuum insulation are required. A bunkering vessel with a capacity of 7,500㎥ typically uses 600 to 800 tons of high-nickel steel, 200 to 300 tons of Invar alloy, and 4,000 to 5,000㎡ of vacuum insulation panels. These core materials are essential for ensuring stability and efficiency under cryogenic conditions, and are therefore expected to contribute to the continued growth of the materials industry.

▲ POSCO’s independently developed high-manganese steel for cryogenic applications was officially listed in 2022 as a material standard under the IGC Code by the MSC of the IMO. It is now approved for use in cryogenic cargo tanks and fuel tanks for LNG, LPG, and other liquefied gases. The photo shows high-manganese steel being transported by a vacuum suction crane.

I POSCO Group’s Strategic Direction in the Era of Expanding LNG Propulsion

▲ POSCO Group’s first LNG-dedicated carrier ‘HL FORTUNA’.

Starting with the implementation of the GHG pricing mechanism in 2028, the IMO is expected to strengthen taxation standards and raise the per-ton charge over time. As a result, the number of LNG-powered vessels is projected to increase further.

Currently, LNG-fueled ships account for less than 10 percent of the global fleet, with a total of 1,308 vessels. By 2028, the number is expected to exceed 2,300, and the number of bunkering vessels will need to increase from the current 23 to at least 50.

In line with this trend, POSCO Group is introducing LNG-dedicated carriers to respond to the GHG pricing mechanism and other international environmental regulations, while actively expanding its energy business. On May 23, POSCO Group unveiled its first proprietary LNG carrier, HL FORTUNA, at HD Hyundai Samho in Mokpo, Jeollanam-do.

HL FORTUNA is an LNG carrier with a length of 299 meters, a beam of 46.4 meters, and a cargo capacity of 174,000㎥. It is built for transporting North American LNG. The vessel can carry out a single shipment that supplies Korea’s entire population with natural gas for 12 hours. It is fitted with a dual-fuel system that uses LNG as its main fuel, along with a high-efficiency reliquefaction system that cools down boil-off gas and turns it back into liquid fuel, enabling compliance with international environmental regulations.

After completing sea trials, the vessel will go into global LNG trading in the second half of the year. Starting in 2026, it will load cargo at the Cheniere terminal in Louisiana, United States, and will be used for domestic supply and overseas trading. It is expected to make over five round trips annually based on the Gwangyang LNG Terminal, transporting POSCO International’s long-term LNG volumes from North America.

With the introduction of this LNG carrier, POSCO Group has further built up its LNG value chain, covering production, storage, and power generation. Moving forward, the Group plans to keep up with rapidly changing international environmental regulations and seek out new opportunities across its LNG business and other key areas by leveraging group-wide synergies and capabilities.

In a world where global dynamics are shifting at an unprecedented pace, what key economic and industrial trends should we focus on today? Experts at the POSCO Research Institute provide in-depth insights into global industries and economic trends, specifically those affecting POSCO Group’s core businesses. Standing at the threshold of a sweeping transformation in the mobility sector, Senior Researcher Gi-Yong Jeon of the POSCO Research Institute takes a closer look at the emerging industries driven by the hyperloop technology and examines how these shifts could reshape the demand for steel.

Senior Researcher Gi-Yong Jeon, POSCO Research Institute

Around the world today, advanced technologies such as artificial intelligence (AI) are converging with sustainability initiatives and redefining the very nature of how we move. In the mobility industry, instead of a supplier-centered perspective based on uniform routes and fixed schedules, a demand-driven model focused on personalized transportation that maximizes mobility is increasingly emphasized. In addition, there are sweeping transformations in the mobility industry in the search for solutions regarding societal challenges such as urban centralization, an aging society, and environmental pollution in connection with the transportation sector. In response, we examine the emerging industrial trends represented by the hyperloop, and analyze how these changes are expected to affect the demand for steel.

I Spotlight on the Future of High-Speed Vacuum Trains: Hyperloop

▲A conceptual diagram of the internal structure of a commercialized Hyperloop. The train runs inside the tube at 1,000 km/h. (Image source: Eurotube Foundation Site(https://eurotube.org))

Elon Musk, CEO of Tesla, recently brought the hyperloop back into the spotlight by mentioning a transatlantic tunnel project on X (formerly Twitter). He suggested that with a $20 billion investment, it would be possible to build an underwater link connecting New York and London. If an underwater hyperloop transportation system is built, passengers could travel from New York to London in under 60 minutes.

The idea of a transatlantic tunnel connecting the United States and Europe has been floated before, but has never materialized due to severe technical limitations and astronomical costs*. With Musk’s renewed proposal, attention has once again turned toward hyperloop technology, which promises speeds exceeding 1,000 kilometers per hour.
*It is estimated that constructing the tunnel using the same method as the Channel Tunnel, which connects the United Kingdom and France, would require an investment equivalent to the size of the U.S. GDP.

“Hyperloop” is a compound of “hyper” from “hypersonic,” meaning faster than the speed of sound, and “loop,” meaning a circulation ring. It refers to a next-generation high-speed transportation system where capsule-shaped vehicles travel inside a vacuum tube. The hyperloop consists of fully sealed vacuum tubes, passenger capsules, and tracks responsible for propulsion and levitation, and the capsule can travel at speeds over 1,000 km/h in the tube.

To minimize air resistance* at these high speeds, the internal pressure of the tube must be reduced to about 1/1,000th of atmospheric pressure (a near-vacuum). In addition, linear motor propulsion devices must be used for the capsules to levitate by magnetic levitation systems. There are two types of linear motor propulsion: linear induction motor (LIM) or linear synchronous motor (LSM). The LIM system is relatively easy to install and cost-effective for infrastructure, and is mainly used in medium-to-low speed maglev trains such as Linimo in Japan. By contrast, the infrastructure of the LSM system is more expensive but it has a stable power supply even at high speeds, making it suitable for ultra-high-speed trains such as EU HARDT and Japan’s Chuo Shinkansen.

*Air resistance at 200 km/h is four times greater than at 100 km/h, so the tube’s internal pressure must be about 1/1,000th of atmospheric pressure.

For the hyperloop to become a practical mode of transportation, it must first secure both safety and economic feasibility. Because the system must maintain a near-vacuum environment while traveling at high speeds, the stability of the train is critical. The tubes that form the hyperloop tracks must withstand not only their own weight, but also the weight of the capsules, the shocks from high-speed travel, thermal expansion, and atmospheric pressure.

Moreover, as the gap between the capsule and the tube narrows and the capsule approaches the speed of sound, a phenomenon known as the Kantrowitz limit, where airflow inside the tube becomes blocked, may occur. To overcome this issue, it requires securing sufficient clearance by enlarging the diameter of the tube. This demands the development and supply of materials that not only prevent deformation and damage at connection points but also offer excellent airtightness, workability, and economic efficiency. Examples of such materials include PosLoop355 developed by POSCO, and ASTM A1018 Grade 36 steel by AK Steel.

▲A 2.5m diameter hyperloop tube being manufactured by SeAH Steel using POSCO Special Steel PosLoop355.

In underground tunnel sections, ultra-high-density concrete tubes are being considered as an alternative to steel pipes, and ultra-high-performance concrete tubes, such as Hypercrete, are already under development.

I How Close Is Hyperloop to Commercialization?

Considering the demonstration testing plans of hyperloop manufacturers and the conditions needed to secure economic feasibility, the commercialization of Hyperloop is expected to occur after 2030. Countries around the world are building and testing pilot tracks to develop hyperloop technology. The achievements of leading companies are as follows:

[Hardt Hyperloop]
Hardt Hyperloop, a Netherlands-based hyperloop development company, has established the European Hyperloop Center (in Veendam, Groningen Province, Netherlands) and is actively conducting technology development and testing. It plans to build commercial hyperloop lines in the Netherlands and Canada after 2030.

▲A view of the European Hyperloop Center test line using POSCO steel. The 420m-long hyperloop test line, which is scheduled to be completed in March 2024, includes the world’s first Y-shaped switch that allows for changing tracks while in motion. (Image source: Hardt)

POSCO has collaborated with its Steel Research Laboratories, Steel Solutions Research Laboratories, and Marketing Division to participate in the entire process from design to production of the European Hyperloop Center (EHC). It supplied 352 tons of PosLoop355 steel, a material that is 27% lighter than Hardt’s original design. This material is the world’s first specialized steel for hyperloop tubes and features vibration-damping performance 1.7 times higher than that of conventional steel and superior seismic resistance. Additionally, for high-speed route-switching tests on the pilot track, POSCO also supplied 123 tons of high-grade heavy plates.

▲Inside the hyperloop where the European Hyperloop Center is developing technology. (Image Source : Hardt Hyperloop Linkedin)

Moreover, POSCO International invested in Hardt Hyperloop in 2022 as part of its global new business development strategy, acquiring a 6.1% equity stake and securing supply rights for steel materials. In 2023, it further strengthened its relationship by signing a strategic cooperation agreement to collaborate on projects in Europe and the Middle East. POSCO and POSCO International plan to continue promoting POSCO’s steel materials for use in other global hyperloop pilot track projects.

[The Boring Company]

The Boring Company, a U.S.-based transportation infrastructure firm founded by Elon Musk, specializes in the design, construction, and operation of underground tunnels. It is conducting technology verification by building test tracks, designing vacuum tubes, and developing capsule prototypes for hyperloop systems.

[CASIC, China Aerospace Science and industry Corporation]

China Aerospace Science and Industry Corporation (CASIC), a state-owned enterprise, is currently developing a hyperloop system called “T-Flight.” In November 2023, the company completed a 2-kilometer hyperloop test track in Datong, Shanxi Province. However, since trial runs have been conducted only over a relatively short section, additional testing under a variety of conditions remains necessary. During recent trials, the T-Flight system achieved a top speed of 623 kilometers per hour, and CASIC plans to further increase this to 1,000 kilometers per hour in future tests.

In South Korea, there were plans to build a hypertube* demonstration complex in the Saemangeum region and to secure core technologies for its development. However, the project failed to pass the preliminary feasibility assessment conducted in 2023. Momentum for the initiative was reignited in June 2024, when the South Korean government abolished preliminary feasibility evaluations for national research and development projects. Following this decision, the Ministry of Land, Infrastructure, and Transport officially announced on June 9 the launch of research and development efforts for key hypertube technologies, in particular, magnetic levitation and propulsion systems. The government plans to invest a total of KRW 12.7 billion (approximately USD 9.5 million) over the next three years until 2027 to develop four critical technologies: dedicated hypertube tracks, superconducting magnet systems, driving control technologies, and the design and manufacturing of capsule bodies.

*In South Korea, the domestic version of the hyperloop system is referred to as “hypertube.”

The global hyperloop technology market is experiencing rapid growth. If major countries such as those in Europe replace intercity rail networks with hyperloop systems, the market is projected to reach approximately USD 77 billion by 2034. However, several challenges remain, including the need to develop technologies capable of accommodating the numerous curves found in existing railway routes, as well as the issue of high construction costs. As a result, it is expected that countries such as those in Europe will adopt hyperloop technologies more as a complementary solution rather than as a complete replacement for existing rail infrastructure.

I Steel Industry Sees New Opportunities in Hyperloop, the Next-Generation High-Speed Transport

If large-scale infrastructure projects connecting cities with hyperloop systems move forward, it is expected to have a positive impact on the demand for steel. This is because a wide range of infrastructure elements, such as vacuum tubes, intersections, foundational facilities, magnetic levitation systems, and vacuum maintenance systems, will require materials such as steel pipes, structural steel, and stainless steel (STS). The total distance between major cities in Europe is estimated to be around 10,000 kilometers. If these routes were replaced with hyperloop systems, the demand for steel could exceed 20 million tons.

The hyperloop, a next-generation high-speed mode of transportation, presents a significant breakthrough opportunity for the steel industry. To capture future demand in the evolving mobility market, it will be crucial for steelmakers to build stable cooperative networks and continuously develop high-value-added, region-specific steel products tailored to the needs of hyperloop infrastructure.

The trends in POSCO Group’s flagship business area are explained by experts in an easy-to-understand manner. The global energy market is paying attention to liquefied natural gas (LNG), as an alternative to overcome the limitations of renewable energy. In response, POSCO Group is making every effort to establish a LNG value chain, including offshore gas field projects and the construction of LNG terminals. In Part 5, Senior Researcher Young-geun Joo of the POSCO Research Institute sheds light on POSCO Group’s LNG value chain.

Q What is behind the growing attention to LNG in the global energy market?

While there is a long-term push toward eco-friendly renewable energy and hydrogen, the technologies and economic feasibility of these solutions are not yet fully developed. As a result, LNG is being used as a bridge energy source to replace coal power. The main component of LNG is methane, a molecule made up of one carbon atom and four hydrogen atoms. This structure results in lower carbon dioxide emissions compared to coal or oil. Additionally, the refining process removes impurities, leading to lower emissions of nitrogen compounds, other pollutants, and ultrafine particles.

In fact, when generating 1 GMW of power, carbon dioxide emissions vary significantly by energy source: coal power produces 888 tons, oil power 733 tons, gas power 499 tons, combined-cycle (LNG) power 389 tons, solar power 85 tons, and nuclear power 29 tons. While LNG emits more carbon dioxide than renewable or nuclear energy, it shows significantly lower emissions compared to oil and coal power.
Additionally, LNG can also be used as an alternative to address the seasonal and intermittent nature of renewable energy sources and is highly competitive in the global energy market.

Q The LNG value chain has been attracting growing attention. What is the concept of it?

The value chain, described as a “chain of value,” refers to a series of activities through which a company adds value at every step of a product or service process. The process can be divided into stages such as planning and production, distribution, and usage. This entire value chain can then be compared to the flow of a river, categorized into upstream (the upper stream), midstream (the middle stream), and downstream (the lower stream).

The traditional oil and gas industries simply divide the value chain into upstream (production, distribution, and storage) and downstream (utilization). However, in 2016, POSCO Group added the concept of midstream to enhance LNG terminal capabilities, strengthen trading expertise, improve the integration between upstream and downstream activities, and drive business expansion.

▲ LNG value chain (Source: POSCO International)

First of all, upstream involves the exploration and production of natural gas. POSCO International has been producing natural gas in Myanmar since June 2013, after 13 years of development. Midstream deals with the liquefaction, distribution, and storage of natural gas. This stage includes necessary elements such as LNG export terminals or liquefaction terminals, specialized LNG carriers, and import or regasification terminals like the Gwangyang LNG Terminal. LNG trading, the business of trading LNG, is also part of this phase. Lastly, the downstream stage refers to the demand points where natural gas is consumed. These include POSCO’s steel mills, POSCO International’s Incheon LNG Combined Cycle Power Plant, as well as residential, industrial, and commercial facilities that use city gas.

Q What makes POSCO Group’s LNG value chain stand out?

The energy industry requires massive investments, amounting to trillions of won, with operations producing and consuming tens to hundreds of thousands of tons of natural gas in both upstream and downstream sectors. Amid growing volatility in global energy markets driven by factors such as the Russia-Ukraine war and geopolitical tensions in the Middle East, building an LNG value chain allows POSCO Group to maximize synergies and effectively respond to volatility. POSCO Group produces and consumes a large amount of natural gas, which enhances liquidity and allows it to maintain a stable supply to its downstream operations and use trading, swaps, and other mechanisms to ensure a reliable LNG supply even during disruptions.

In upstream, natural gas must be produced and sold at a high price to generate substantial profits, while in downstream, LNG must be purchased at a low price. By linking these through midstream integration, POSCO enhances price flexibility, creating synergies and boosting profitability in both business and revenue.

Q Where and how does POSCO Group produce natural gas?

POSCO International began offshore exploration in Myanmar in 2000, discovered three subsea gas fields, and has been commercially producing natural gas since June 2013. This project stands out as the largest overseas resource development undertaken by a domestic private energy company. POSCO International transports natural gas through a 105-kilometer subsea pipeline and sells it to Myanmar and China via a gas pipeline linked to an onshore terminal in Kyaukpyu, Myanmar.

The daily production is about 500 million cubic feet, which accounts for 9% of Korea’s annual natural gas consumption. Currently, the company is producing natural gas from three subsea gas fields and discovered another subsea gas field, called Mahar, in a nearby area in 2020.

Additionally, POSCO International expanded its upstream operations by acquiring Senex Energy, Australia’s fifth-largest company in the oil and gas sector, in 2022. POSCO International, together with its partner Hancock Energy, plans to invest a total of 650 million Australian dollars by 2026 to acquire Senex Energy and secure natural gas reserves equivalent to 44% of Korea’s annual consumption.

In addition, at the end of 2021, POSCO International won an exploration rights for the PM524 block, located offshore on the eastern side of the Malay Peninsula, from Malaysia’s state-owned oil company, PETRONAS. POSCO International is currently conducting feasibility evaluations and plans to begin exploration and development in 2025. In 2023, POSCO International, through a consortium with Indonesia’s state-owned enterprise PHE^*, acquired exploration rights for the Bunga block in Indonesia. The exploration will continue until 2029.

*Pertamina Hulu Energi (PHE): A subsidiary of Indonesia’s state-run oil and gas company Pertamina.

Q What is the capacity of the Gwangyang LNG Terminal operated by POSCO International?

POSCO International began the operation of Korea’s first private LNG terminal in 2005. The company stores imported LNG at the Gwangyang LNG Terminal and uses it for facilities such as POSCO’s steel mills and its LNG Combined Cycle Power Plant.

▲A view of POSCO International Gwangyang 1st LNG Terminal, which was completed on July 9, 2024.

The Gwangyang LNG Terminal 1 currently has six tanks with a storage capacity of 930,000 kℓ. In January 2023, construction of the Gwangyang LNG Terminal 2 began, with plans to add two new tanks (Nos. 7 and 8), each with a capacity of 200,000 kℓ, by 2025. When completed, the terminal will boast a total storage capacity of 1.33 million kℓ with eight tanks, securing its position as the number one private LNG terminal in Korea and the 11th largest worldwide.

Furthermore, in August 2020, POSCO International became Korea’s first certified LNG supplier for vessels and began providing its initial LNG supply to international shipping companies. It is also actively advancing its LNG bunkering business by establishing dedicated infrastructure to supply LNG fuel to marine vessels. POSCO International plans to build a dedicated bunkering infrastructure at the Gwangyang LNG Terminal to stably supply low-carbon fuel to ships, thereby revitalizing the domestic LNG bunkering market and actively responding to international environmental policies.

Q How is the natural gas stored at the Gwangyang LNG Terminal connected to daily life?

In Korea, Korea Gas Corporation (KOGAS) exclusively installs and manages the national gas supply pipeline network, which spans approximately 4,937 km. This network serves as both a transportation channel and a storage system for natural gas. The Gwangyang LNG Terminal converts LNG into natural gas and measures the amount before introducing it into the KOGAS pipelines. Once introduced, the power plants in Incheon withdraw the measured amount of gas for use.

While domestic regulations prohibit the direct sale of LNG gas to third parties in Korea, POSCO International is actively pursuing LNG trading through its Singapore trading subsidiary. In 2023, it traded 2.12 million tons of LNG, equivalent to 4% of Korea’s annual LNG consumption. The company plans to expand its trading volume to 3.57 million tons by 2025.

Q What lies ahead for the global LNG market?

The global LNG market is poised for steady growth, largely due to Europe’s push to replace pipeline natural gas (PNG) and the ongoing shift to greener energy solutions. Qatar, one of the world’s top LNG exporters, has announced that it plans to expand its annual production capacity from 77 million tons to 142 million tons by 2030. Meanwhile, the second term of the Trump administration is anticipated to maximize natural gas production and exports by easing regulatory restrictions on shale gas production and LNG exports.

The Russia-Ukraine conflict has accelerated Europe’s adoption of LNG as a substitute for Russian PNG. For example, despite Germany’s policy of expanding renewable energy, it has recently completed an onshore LNG terminal to secure infrastructure for importing LNG to replace Russian PNG.

In its annual market outlook last August, global energy giant Shell projected that global LNG demand could rise by 50%, reaching between 625 million and 685 million tons by 2040. As we enter a period of global energy transition, we expect LNG to play a key role as a fuel.

The trends in POSCO Group’s flagship business area are explained by experts in an easy-to-understand manner. In Part 4, we review the issue concerning “all-solid-state batteries,” which are expected to be next-generation batteries, with Principal Researcher Jae-beom Park at the POSCO Research Institute.

Batteries are mainly divided into primary and rechargeable batteries. Primary batteries, including dry cells and mercury batteries, cannot be recharged after use. On the other hand, rechargeable batteries can be recharged and used multiple times, so they are more environmentally friendly and economically efficient. There are many types of batteries, but the most commonly used rechargeable battery is the lithium-ion battery (LIB).

Compared to other rechargeable batteries, lithium-ion batteries are used in various applications that take advantage of their superior features in all aspects, including lifespan, ease of charging, discharge rate, and costs. In particular, they are widely used in electric vehicles and mobility devices that require long operating range on a single charge due to their high energy density.

However, even LIB, which is considered the most ideal commercial rechargeable battery to date, requires continuous improvement and supplementation in terms of energy density, price, and stability. To understand why, it is necessary to look at how LIB works.

The four core components of an LIB are cathode material, anode material, electrolyte, and separator. Among them, the electrolyte acts as an important medium that helps lithium ions move smoothly between the anode and cathode materials. Since one of the main components of the electrolyte is a flammable organic solvent, there is a risk of fire or explosion in high-temperature environments or external impact situations. To solve this problem, the performance of materials such as anode and cathode materials or electrolytes can be improved, but the ultimate solution is to change the battery type. Post-LIB or next-generation batteries, such as all-solid-state batteries, lithium-sulfur batteries, and sodium-ion batteries, have emerged as solutions, and all-solid-state batteries, which are called dream batteries for dramatically improved energy density and stability, have recently received the spotlight worldwide.

The biggest difference between all-solid-state and lithium-ion batteries is the form of the electrolyte. An all-solid-state battery replaces liquid electrolyte in an LIB with a solid powder. The replacement not only changes the shape but also other LIB materials significantly. It eliminates a separator that prevents direct contact between the anode and cathode during the movement of lithium ions, as the solid electrolyte acts as a separator.

Stability

All-solid-state batteries have many advantages, and stability is the leading example. Since the electrolytes in LIBs are made of flammable organic solvents (liquid), there is a high risk of fire or explosion when the separator that blocks contact between the anode and cathode materials melts due to heat or is damaged for various reasons. However, the solid electrolyte of an all-solid-state battery acts as a separator and more effectively blocks contact between the anode and cathode materials. Therefore, it reduces the risk of fire or explosion. Moreover, the risk of leakage or oxidation due to temperature change or external impact is lower. This means reduced maintenance costs due to excellent ease of use and durability.

Higher energy density

Improved safety helps simplify battery external cases and cooling devices and naturally achieves higher energy density. If the cooling system components can be minimized, the remaining space can be used for battery cells. It will allow improved energy density per battery pack. Moreover, lithium, which has the largest energy capacity among the candidates as an anode material, can theoretically increase the energy density by up to nearly 10 times compared to conventional graphite-based anode materials. Therefore, if we can solve the safety problem of the lithium metal anode material, which is called the ultimate, next-generation anode material, and commercialize it, we can expect to dramatically improve energy density.

Coping with temperature change better

Another big advantage of changing liquid electrolytes to solids is their lower sensitivity to temperature, which allows them to operate over a wider range of temperatures. Conventional lithium-ion batteries mainly operate smoothly between -10°C and 40°C because the ion conductivity* decreases significantly at low temperatures below -10°C, and the risk of thermal runaway increases at high temperatures. On the other hand, all-solid-state batteries operate without problems in a wide temperature range of -40°C to 100°C. Therefore, they can improve the risk of battery discharge in winter or fire caused by high temperatures and can also significantly reduce the need for cooling devices to dissipate heat.
*Ionic conductivity: The degree to which ions contribute to equivalent electrical conductivity in an infinite dilution state

Simplified processes and cost reduction

While conventional lithium-ion batteries have a monopolar structure in which a cell has one electrode, all-solid-state batteries can be converted into a bipolar structure in which multiple electrodes are connected in series in a cell. The bipolar structure increases the voltage of the battery by stacking multiple electrodes in a cell, thus increasing the output. Moreover, we simplify processes, increase space utilization, and reduce costs by minimizing the BMS* for external material cooling systems.

*Battery Management System (BMS): A system that monitors the battery status and controls it to maintain the optimal conditions for use

Solid electrolytes used in all-solid-state batteries are largely divided into organic and inorganic types. The sulfide-based type is most likely to be commercialized for electric vehicles, and has attracted the attention of many companies. Sulfide-based materials are relatively soft and form a wide interface* between the electrode and electrolyte, resulting in high lithium ion conductivity.

Various structures depend on the presence of a crystalline structure, even within sulfide-based materials. In particular, solid electrolytes with a structure of LGPS (Li₁₀GeP₂S₁₂) or argyrodite (Li₆PS₅CL), a rare sulfide mineral containing germanium, are known to be able to implement ionic conductivities similar to or higher than the ionic conductivities of general liquid electrolytes (5–10 mS/cm).

*Interface: The boundary between two spatial regions occupied by different substances or physical states of matter

※ Ionic conductivity : LGPS (Li₁₀GeP₂S₁₂) 12~25mS/cm, Argyrodite(Li₆PS₅CL) 2~12mS/cm

Many companies are actively conducting R&D to create a more perfect all-solid-state battery. While it varies by company, ternary cathode materials* are likely to be the most active cathode material. For anode materials, a transition has occurred from the commonly used graphite-based materials to silicon-based materials, and eventually to lithium metal anodes, which offer higher energy density per volume and weight. Therefore, the material composition of an all-solid-state battery with high commercialization potential is the ternary cathode-sulfide solid electrolyte-lithium metal anode.

*Ternary cathode material: A cathode material in which other elements are added to lithium cobalt oxide (LCO), which is mainly used as a cathode material, for a total of three elements. It is divided into nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminum (NCA).

Leading companies have already announced plans to commercialize all-solid-state batteries by 2027, and they plan to mass produce them by 2030 at the latest. The fact that the original patent related to the composition of sulfide-based argyrodite solid electrolyte, which is considered to have the most commercialization potential, will expire in 2028 is also expected to affect the timing of commercialization.

The University of Siegen in Germany filed a PCT patent application for a sulfide-based source patent in 2008. The patent was later transferred to another company, which now holds the intellectual property rights. When the patent expires in 2028, 20 years from the date of application, many companies are likely to begin mass production of solid electrolytes.

Some companies are also preparing semi-solid-state batteries. Semi-solid-state batteries use gel-type electrolytes that are an intermediate form between liquid and solid. They are being developed to complement the shortcomings of liquid and solid electrolytes and leverage their advantages. Since they can utilize most of the processes of conventional lithium-ion batteries, the technology can be considered a stepping stone before the full-scale transition to all-solid-state batteries.

In addition to technical issues to overcome, such as low ion conductivity and high interface resistance, other important challenges include securing mass production and price competitiveness similar to that of lithium-ion batteries.

The price of the solid electrolyte for all-solid-state batteries is USD 1000/kWh, and excluding other materials, the price significantly exceeds the current price of lithium-ion batteries. This is because lithium sulfide, the core of solid electrolytes, is currently manufactured in labs and pilot lines, and the economy of scale, where the average prices drop as production increases, has yet to be realized.

However, the hope is that, except for some electrolytes that contain rare earth elements such as germanium, the raw material price of general solid electrolytes is around USD 10/kg. In other words, if the production volume can be increased with improved processes, the market price is expected to drop to USD 30/kWh. Reducing the price of solid electrolytes and lithium sulfide and overcoming technical issues are important prerequisites for popularizing all-solid-state batteries.

To secure competitiveness in the solid electrolyte business, a key material for all-solid-state batteries, POSCO Group took a 40% stake in Jeongkwan Co., a display materials and parts company, established POSCO JK Solid Solutions as a joint venture in February 2022, and completed the construction of a product plant capable of mass producing 24 tons of sulfide-based electrolytes per year. POSCO JK Solid Solutions is currently preparing for a gradual expansion to eventually increase production volume to 7,200 tons and is conducting tests on all-solid-state battery products with key customers.

Overseas, POSCO invested equity in ProLogium Technology, an all-solid-state battery manufacturer established in Taiwan in 2006, and has expanded the supply chain for all-solid-state battery materials after signing a joint research agreement. Moreover, it is considering various business plans to secure the supply chain for lithium sulfide (Li2S), a key raw material for sulfide-based solid electrolytes.

POSCO Group also has the competitiveness to mass-produce lithium metal cathode materials, which are as important as solid electrolytes in all-solid-state batteries. Since it owns a salt lake in Argentina with high purity and low impurities, it has the advantage of increasing the purity and removing impurities using lithium as an anode material. POSCO is recognized as having the world’s top level technology for lithium purification.

Lithium metal manufacturing requires an ultra-thin and wide production process to economically apply to rechargeable batteries for electric vehicles. The roll-to-roll process, POSCO’s original technology accumulated through rolling and plating processes, is ideal for making the lithium anode ultra-thin and wide. To secure differentiated competitiveness, POSCO plans to apply the process to lithium metal production. It is currently providing samples and conducting tests of lithium metal products using the electroplating method.

POSCO Group is building a full lineup by concentrating its differentiated technologies to secure competitiveness in raw materials for all-solid-state batteries, considered representative next-generation batteries. It plans to continue its efforts to create new added value by responding to the changing global market environment.