South Korean chemical company LG Chem has announced that it has reached an agreement with domestic steelmaker POSCO Holdings to collaborate on developing a project aimed at the decarbonization of the steel industry. The mega project will be backed by several institutions including the Korea Research Institute of Chemical Technology and the ministry of science.
Within the scope of the agreement, both parties will realize a carbon capture and utilization (CCU) demonstration project, under which LG’s proprietary technology will convert carbon captured at POSCO’s Pohang plant into carbon monoxide and hydrogen that are utilized as reducing agents in steelmaking. Traditionally, coal is used as a reducing agent to extract iron from iron ore in the steelmaking process, releasing carbon dioxide. As a result, this project is expected to reduce the dependence on coal.
Construction of the facility where the demonstration project will take place will begin at the Pohang plant in 2028, with the demonstration operations expected to continue through 2030.
LG Chem and POSCO Holdings aim to drastically reduce carbon emissions and secure key raw materials and fuels in a cost-efficient manner, contributing to South Korea’s carbon neutrality goals.