POSCO has commissioned South Korea’s largest electric arc furnace (EAF) at its Gwangyang Works, marking a significant step in the company’s transition toward low-carbon steel production. The new facility, with an annual production capacity of 2.5 million tonnes, strengthens POSCO’s decarbonization strategy while expanding its ability to meet rising global demand for environmentally sustainable steel products.
The inauguration ceremony was attended by senior government officials, local representatives and POSCO executives, underscoring the strategic importance of the investment for both the company and South Korea’s manufacturing sector. Construction of the facility began in February 2024 as part of POSCO’s long-term roadmap to reduce greenhouse gas emissions and align its operations with evolving international climate regulations and customer sustainability requirements.
Built with an investment of approximately KRW 600 billion, the project involved a cumulative workforce of around 270,000 personnel during construction. The newly completed furnace represents the largest single electric arc furnace installation in the country and is expected to play a central role in transforming POSCO’s steelmaking operations.
Unlike conventional blast furnace production, which relies on iron ore and coking coal, electric arc furnaces primarily use recycled steel scrap as raw material. This production process significantly lowers carbon emissions, with the new facility expected to reduce greenhouse gas emissions by up to 75 percent compared with the company’s traditional blast furnace operations, depending on raw material quality and electricity sources.
Beyond expanding low-carbon production capacity, POSCO is also advancing proprietary technologies designed to improve the quality of electric arc furnace steel. One such innovation is its “Haptang” process, which combines molten iron from both electric arc and blast furnace operations to manufacture premium-grade steel while maintaining substantially lower carbon emissions.
The company is also strengthening capabilities in scrap selection, refining technologies and composition control to support the large-scale production of high-grade automotive steel and electrical steel products by 2030. Premium steel manufactured through electric arc furnace technology has been designated as one of POSCO’s eight strategic growth products, with dedicated teams across research, production and commercial operations accelerating product development. In parallel, POSCO continues to develop complementary carbon-reduction technologies for its existing steelmaking infrastructure, including hydrogen-rich gas injection systems, advanced converter technologies and low-carbon raw material solutions.
The investment comes as global steel manufacturers face increasing pressure to decarbonize operations amid tighter emissions regulations, expanding carbon pricing mechanisms and the implementation of international measures such as the European Union’s Carbon Border Adjustment Mechanism (CBAM). The new electric arc furnace will serve as a critical bridge while POSCO progresses toward commercializing its proprietary hydrogen-based steelmaking technology, HyREX.
The company aims to complete development of its HyREX technology using a demonstration plant with an annual capacity of 300,000 tonnes by 2030 before gradually transitioning to a hydrogen-based production system. Development work is already progressing following regulatory approvals for the expansion of facilities near its Pohang operations.
With the commissioning of the new electric arc furnace, POSCO is reinforcing its commitment to sustainable manufacturing, strengthening its portfolio of low-carbon steel products and positioning itself to meet the evolving requirements of customers across the global automotive, infrastructure and industrial sectors
