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.