South Korea has enacted the K-Steel Act, a landmark legislation designed to bolster the competitiveness of the domestic steel sector and accelerate its transition toward carbon neutrality, according to media reports. Passed by the national assembly, the act establishes a nationwide framework for industrial upgrading, low-carbon investment, and structural reform at a time when steelmakers face intense global and domestic pressures.
The act, formally titled the Special Act for Strengthening Steel Industry Competitiveness and Carbon Neutral Transition, has been described as the steel sector’s most significant and long-awaited policy achievement. Industry observers say the law provides an essential institutional foundation, though additional measures such as lower industrial electricity prices may still be needed.
South Korea’s steel industry plays a central role in the national economy, supplying critical materials for manufacturing and contributing significantly to production, exports, and employment. However, steelmakers are confronting multiple challenges such as intensifying US trade protectionism, including the 50 percent steel tariff; rising carbon-neutrality obligations; persistent overcapacity in China; and weakening demand at home and abroad.
Key provisions: five-year plans, special committee and low-carbon support
The K-Steel Act requires the minister of trade, industry and energy to prepare five-year basic plans and annual action plans focused on boosting competitiveness and supporting decarbonization.
A Special Committee for Steel Industry Competitiveness Enhancement, operating under the prime minister, will oversee policy direction and ensure coordinated implementation.
The legislation incorporates measures for identifying and supporting key low-carbon steel technologies, creating domestic demand for advanced steel grades, establishing low-carbon steel special zones, supporting construction of next-generation production facilities, strengthening recycled-steel supply chains, integrating steel-critical infrastructure, such as electricity, water and hydrogen, into national planning, and providing the legal foundation for expedited restructuring where needed.
Industry reaction: historic milestone for steel sector
Industry leaders welcomed the legislation. Lee Kyung-ho, executive vice chairman of the Korea Iron & Steel Association, called it a “historic milestone”, noting that it is the first steel-industry-specific law in around 40 years since the Steel Industry Promotion Act of 1970, abolished in 1986.
Steel companies said the act will help them navigate current market and technological challenges.
Steel Industry Advancement Plan complements act
Structural modernization and competitiveness initiatives are expected to accelerate with the passage of the K-Steel Act. In early November, the ministry unveiled the Steel Industry Advancement Plan, a roadmap to support an industry weakened by global oversupply, trade pressures and the demands of decarbonization.
The plan designates special carbon steel, artificial intelligence and hydrogen-based steelmaking as the three strategic pillars for the sector’s future, backed by investments totaling KRW 200 billion ($136.11 million). It also includes stronger measures to counter unfairly priced steel imports.
Additionally, leveraging the “AI Factory Alliance” formed by POSCO, KG Steel and Daehan Steel, the government aims to develop steel-specific AI technologies and establish an integrated AI demonstration system covering the entire steel production cycle by 2026.