Both companies hope to further “strengthen technical and business cooperation domestically and abroad to apply Smart Factory platforms.”

From the left, POSCO CEO Ohjoon Kwon, President of POSCO ICT, Doo-hwan Choi, Matthias L. Heilmann BHGE CDO, Wouter Van Wersch GE APAC CEO.

Therefore, POSCO and GE combined PosFrame, POSCO’s Smart Factory platform, and APM (Asset Performance Management)*, GE’s representative Smart Factory solution, to develop and commercialize PosFrame+, a hybrid Smart Factory platform optimized for steel facilities.

POSCO’s PosFrame is specialized for the steel industry, capable of collecting all information from the production process for analysis and visualization. GE’s APM can increase the operation speed and stability with early warnings and failure predictions based on collected data.

POSCO and GE will apply GE’s APM solution to POSCO’s power generator No. 5 at Pohang Steelworks to test APM’s compatibility with the existing PosFrame, and to develop modules and verify the system’s adaptability. Once the companies finish developing the hybrid platform, PosFrame+, which predicts failures in steel facilities by combining PosFrame and APM, it will be a groundbreaking turning point for smart factory platforms.

During the signing ceremony, CEO Kwon said, “The development of smart technology for steel facilities will give momentum to the commercialization of smart solutions in the global market.”

Chief Digital Officer of BHGE, Matthias L. Heilmann stated, “Both companies will create opportunities in all areas by sharing visions and cooperating closely for the acceleration of digital transition of the steel industry.”  

Both companies plan to develop PosFrame+ for steel facilities and related industries, and will also create cooperative models for the global commercialization of PosFrame+ by sharing research cases and primary technologies for smart factories.\

※GE APM

All information collected from the production process can be analyzed automatically to increase the operation rate and stability. Facilities with APM will be equipped with early warnings through malfunction predictions and will be able to minimize maintenance costs and failure risks. A classic example of a successful application case is the “Lazarus project” which revived a combined power plant in Chivasso, Italy. Its operations stopped in 2013 due to the facility’s inefficiency, but after applying APM, the facility was able to revive its efficiency and the restarted operations after two years.

The U-Shaped Relationship

However, the argument is not so black and white according to Spyridon Stavropoulos, Ronald Wall and Yuanze Xu’s Environmental regulations and industrial competitiveness: evidence from China. The study suggests that the relationship between stringent economic regulations and industrial (or economic) competitiveness is U-shaped. Meaning, initially, stringent regulations will increase the cost of production and make companies less profitable, but after a certain turning point, companies will be forced to adapt and innovate, thus becoming more competitive in the long run.

Many activists sit on both sides of the debate. (Source: Ethical Shopper)

When regulation policies are consistent over a long period of time, companies are forced to tackle the root of the problem, instead of focusing on meeting certain numbers. In today’s global economy, many governments have already begun to implement stringent economic regulations that only look to get tighter in the future. In such a context, companies that choose to innovate and come up with solutions to global pollution problems will come out more competitive in the end.

Sustainability Equals Competitiveness

Looking at major economic players around the world, it’s safe to say that environmental sustainability is a common topic on each of their respective national agendas. Pressing national challenges are tied to the environment in one way or another. For example, many countries are shifting their policies to ensure energy security. Countries that import most of their energy from external regions are subject to volatile prices and thus unstable economies. Thus, governments are actively supporting companies that can cultivate domestic, renewable energy sources. Another, more obvious, example is the direct link between pollution and health risks.

China is the fastest developing country in the world, and by 2035, it will be responsible for 28 percent of the total global energy demand. China also happens to be almost completely dependent on energy imports. Subsequently, the government has started a variety of government programs to boost sustainability as part of President Xi Jinping’s pledge to build a “Beautiful China”. These policies also come in the wake of shocking statistics: in 2015, pollution led to 1.8 million premature deaths in China.

Chinese President Xi Jinping laid out a 2-step plan to achieve a “Beautiful China.” (Source: News Gru)

Sustainable Steelmaker

Even with strong government commitment and plenty of programs to support sustainable business, most developing countries lack affordable renewable energy sources and the technology to apply those sources to existing production processes. Nevertheless, the world is changing and only those that adapt and innovate survive and thrive. That’s exactly what POSCO did starting back in 2007.

FINEX: A Game Changer

POSCO came up with a new molten iron production technology called FINEX. The technology allows molten iron and non-coking coal to be produced directly in a blast furnace during the iron-making process. It is different from the conventional blast furnace process, as it combines the coking plant, sinter plant and blast furnace into a single iron-making unit. This lowers production costs and reduces harmful emissions.

FINEX is a sustainable game-changer for steel production.

Ultimately, FINEX is one of the most cost-effective and eco-friendly ways to make steel. The technology mitigates the use of C02, has the lowest process-related emission rates and preserves resources through the use of a wide range of iron ores and non-coking coals. FINEX reduces SOx and NOx emissions by 40 and 15 percent respectively, and fine dust particles can be reduced by 34 percent compared to traditional blast furnaces. Furthermore, the by-products from the process generate highly valuable export gas that can be used for various purposes like electric power generation or natural gas substitution.

On December 7, 2017, POSCO reached 20 million cumulative tons of molten iron production using the FINEX technology. POSCO is not the only company enjoying the benefits of sustainable competitiveness – POSCO’s manufacturing partners can see lower emissions levels when evaluating the entire life cycle of their products.

SEE ALSO: POSCO Reaches 20 Million Tons of Production Using FINEX Technology

Sustainability is no longer just jargon. As environmental issues are intricately tied to the economy and even national security, governments around the world will be actively supporting sustainable companies in the years to come. Companies can expect sustainability and competitiveness to become interchangeable terms in the near future.

What is the Circular Economy?

The circular economy concept gained momentum in the 1970s as academics, businesses, and thought leaders realized that there needed to be a change in the way products were manufactured and disposed of. The general goals of a circular economy involved eliminating waste, using renewable energy to manufacture goods, and to be more respectful of the natural environment.

In a circular economy, resources need to be allocated efficiently while making products that earn a return for the businesses without being too costly to consumers. Products should be durable, recyclable, and easily repaired. Simply put, manufacturers and consumers need to extend the life of their products before they are thrown away.

A well functioning circular economy ensures that products retain value even at the end of their use stage. Ideally, products would be-be 100% recyclable, and even before reaching that stage, they should be durable enough for reuse or remanufacturing. Steel represents a critical piece of this concept as it can be reused, repurposed, and remanufactured after use and then still remains infinitely recyclable. Beyond that, advances in steel production technology have created more energy efficient and green processes for steelmakers.

Steel in the Circular Economy

Steel is used to manufacture and ship almost every product on the globe. Its ubiquity makes it a central piece of the concept of a circular economy and more sustainable production. It can be reused, remanufactured, and recycled without losing any of its properties. Also, due to technological advancements in recent decades, steel has become both lighter and stronger making everything from cars to ships more energy efficient.

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In addition to lightweighting, one must look at steel’s life cycle assessment in order to measure its effect on the circular economy, Last month on The Steel Wire, Dr. Roland Geyer from the University of California at Santa Barbara took an in-depth look at the life cycle assessment of steel. His research aims to show that steel’s benefit to the automotive industry lies not only in its lightweight properties but also in its ability to be recycled and used over and over again – making it the most optimal material for automakers in a circular economy.

POSCO Innovates in Sustainable Steel Production

For its part in the circular economy, POSCO has been pursuing advancements in sustainable steel production from multiple angles. To reduce greenhouse gas emissions, POSCO helped develop the FINEX® process. It is based on the direct use of iron ore fines and non-coking coal while eliminating the coke-making and sintering processes, which are most critical to the conventional blast furnace process. Combining these two decisive advantages led to lower production costs and a reduction of environmental emissions in comparison with the conventional blast furnace route.

For automakers, the steel used to manufacture vehicles is critical to the circular economy in both its production and use. POSCO has been at work developing new automotive steel solutions that are lighter, stronger, and more affordable. They have also begun utilizing advanced AI and IIoT (internet of things) solutions in its automotive steel plants to reduce waste.

Because POSCO GIGA STEEL is lightweight, strong, and affordable, it is the ideal material option for automakers looking to build more sustainable vehicles.

For its manganese steel production, POSCO developed new technology that cut production time in half while increasing efficiency by 10%. Now, instead of melting the iron, lowering the temperature, and then melting it again, POSCO can store the molten iron at its new PosLM facility helping to reduce energy costs and shorten production time.

In order to move toward a circular economy, businesses and industries must make fundamental changes to how their products are manufactured and used. Steel remains a critical piece of this concept as it can be reused, remanufactured, and recycled. However, more needs to be done, and companies like POSCO are taking the lead to develop more sustainable production processes.

*Graphs courtesy of the World Steel Association