Steel is the framework of the world and one of the great assets that has supported human civilization. Since iron first emerged as a material, humanity has been able to create things larger than ourselves and build the infrastructure essential to life. We have benefited enormously from steel. Yet today, the steel industry, long a pillar of national economies, stands at an unprecedented crossroads. What future awaits steel amid this upheaval? And what breakthrough strategy does POSCO have to overcome these challenges? Beyond the “age of fire” that helped lead human civilization, this is the story of steel as it overcomes crisis and is reborn.

The crisis now facing the steel industry is on an entirely different level from a simple economic downturn. This is because an unprecedented combination of risks is arriving all at once: structural oversupply led by China, protectionism and tariff barriers from the United States, and carbon regulations from the European Union (EU). This is what we call a Perfect Storm.

*Perfect Storm: A term referring to an enormous compound crisis in which individual adverse factors—such as oversupply, protectionism, and carbon regulation—overlap at the same time, dramatically magnifying their destructive impact.

These changes are not limited to Korea. In response to the worsening climate crisis, the global trend under the Paris Agreement is to expand the scope of carbon emissions beyond companies’ direct activities to include all indirect emissions, such as those from suppliers and the product-use stage—namely, Scope 3. As a result, steelmakers around the world are facing mounting climate-related pressure. This is why so many are urgently seeking a breakthrough to meet rapidly growing demand for low-carbon steel.

It’s really changing all aspects of our lives. It’s clear that we need to transform the whole society, not just how we produce things, but also how we use them and, for example, how our energy system works.

The first is to continue producing steel the conventional way the second is to seek a new path toward ‘decarbonization’

At this crossroads, there are two possible paths before us. The first is to continue making steel in the conventional way. In the short term, this may appear to be the easier option, allowing companies to avoid additional costs and respond to immediate goals. But the moment an innovative company emerges that has overcome the barrier of carbon regulation, those that chose this path will inevitably fall behind in the market.

The second is to take on the challenge of decarbonization transition head-on, in step with the global direction of environmental regulation. The massive investment required may be burdensome, but it is the only path that can secure leadership in the future market and achieve sustainable growth.

In the end, the choice is ours, and the future of the steel industry also depends on us.

Here are the people moving one step ahead to build the future of steel: the key figures leading POSCO’s Korean-style hydrogen reduction steelmaking project.

Hydrogen reduction steelmaking (HyREX) is a technology that uses hydrogen, instead of coal, as the reducing agent in the ironmaking process that produces molten iron, removing oxygen from iron ore. Unlike the conventional method, in which oxygen in iron ore combines with carbon and emits carbon dioxide (CO2), this process combines oxygen with hydrogen and produces water (H2O) instead of carbon dioxide.

The conventional blast furnace process—commonly referred to simply as the blast furnace method—became the global standard because it can produce large quantities of molten iron economically. However, it has inherent limitations, including air pollution and waste generation caused by the use of coal. By contrast, hydrogen reduction steelmaking can dramatically reduce carbon emissions compared with the conventional blast furnace process, making it a next-generation core technology that steelmakers around the world are racing to commercialize.

Building on its already commercialized FINEX process, POSCO is developing hydrogen reduction steelmaking technology based on a fluidized-reduction furnace. Many overseas steelmakers are developing shaft-furnace-based processes that require high-grade DR Grade pellets, which are made by processing iron ore into uniformly sized spherical forms. POSCO’s HyREX technology, by contrast, can use fine iron ore directly without additional processing, giving it strong cost competitiveness. It also offers the advantage of precise temperature control, helping secure high-quality reduction performance. To commercialize HyREX, POSCO’s dedicated task force is not limiting itself to in-house research, but is expanding its scope globally and seeking answers together with partners around the world.

I believe the hydrogen reduction ironmaking of the future will evolve into an integrated hub of hydrogen, energy, and steel. This will serve as a massive industrial catalyst, not only for Korea’s industries but for industries worldwide.

Even as companies carve out paths of innovation to achieve decarbonization, the successful decarbonization of the steel industry cannot be accomplished through the technological development of any one company alone. Looking back at history, every major transformation was supported not merely by the solitary efforts of individual companies, but by cooperation and support at the national level. The most representative example is the semiconductor industry. Korea stands today as a semiconductor powerhouse because, about 40 years ago, public-private cooperation laid the foundation.

In the early 1990s, the companies dominating the memory semiconductor market were mostly from the United States and Japan. To hold back Korean firms, they erected a high technological barrier in the form of patents. Korean companies faced tremendous difficulty overcoming it. At that critical moment, the government, companies, research institutes, and academia joined hands to form a consortium. This led to the large-scale industry-academia-research-government project behind the development of 64M DRAM in 1992, a landmark achievement in semiconductor history. That success became the decisive turning point that enabled Korea to secure leadership in the memory semiconductor market and establish its industrial foundation. It was a miracle made possible because the necessary foundation—capital, institutions, infrastructure, and talent—had been put in place. The same holds true for the decarbonization of the steel industry. For hydrogen reduction steelmaking to become reality, a robust hydrogen ecosystem must be established so that hydrogen itself can become economically viable.

As the European Union (EU) has begun imposing taxes on carbon emissions generated during production through the CBAM*, concerns are growing that as the rates continue to rise, Korean steel products may lose cost competitiveness by the mid-2030s, ultimately putting the vast European market at risk.

*CBAM(Carbon Border Adjustment Mechanism) : A system that imposes tariff measures based on the carbon emissions of imported products crossing a border.

The steel industry is not only important for past and present generations, but is also a vital industry for our descendants. For it to become a more sustainable industry, the entire nation and industry as a whole must come together.

Under these circumstances, there is an urgent need for long-term, government-level policy support so that companies can move forward with large-scale investments with confidence. For example, Germany is actively promoting GET H2, a major pipeline initiative to build a 5,100-kilometer network connecting hydrogen production sites and demand centers by 2030. Korea, too, must accelerate the development of a hydrogen infrastructure ecosystem in step with this global trend. Fortunately, as part of these efforts, the K-Steel Act—special legislation aimed at strengthening the competitiveness of the steel industry and supporting its carbon-neutral transition—passed the National Assembly plenary session last year, providing a legal foundation. In addition, the Korean-style hydrogen reduction steelmaking national R&D project has begun taking its first steps. These developments are expected to serve as important building blocks in designing a sustainable future for the steel industry.

Steel remains with us today in many different forms. So what form will steel take as it evolves in the future? Just as it did in the distant past, steel will continue to temper itself for the everyday lives of humanity far into the future. We hope you will continue to join us on this journey of The Evolution of Steel.

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