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.