Government of South Korea accelerates investments in hydrogen-based steelmaking through collaboration with POSCO, the country’s largest steel producer. On October 17, Deputy Prime Minister Choi Sang-mok and other key ministers visited POSCO’s Pohang Steelworks. They discussed investment measures and toured the proposed site for hydrogen-based steel production.
Government Support for Carbon-Neutral Investments
DPM Choi emphasized the importance of prompt and proactive investment for economic recovery and sustainable growth. The government has pledged to facilitate a cross-ministerial investment support system and actively assist corporate investments. To date, the government has supported the rapid execution of investment projects totaling 93 trillion won.
For POSCO’s 20 trillion won hydrogen-based steelmaking project in Pohang, the government has streamlined administrative procedures. They have shortened the process by 11 months, exempted maritime traffic safety diagnosis, and expedited environmental assessment. They have also fast-tracked the landfill master plan integration process. Consequently, groundbreaking is expected in June 2025.
Investing in a Sustainable Steel Industry
POSCO’s Pohang and Gwangyang hydrogen-based steelmaking projects forecast a total investment effect of 40 trillion won by 2050. These projects aim to achieve carbon neutrality in the steel industry through innovative hydrogen-based steelmaking technology.
The government plans to provide comprehensive support for these eco-friendly investments by expanding green finance. They will allocate 9 trillion won in 2025 and increase financial support for R&D in core carbon-neutral technologies. They are also pursuing institutional improvements for emissions trading system regulations to allow companies more flexibility.
Supporting New Technologies and Stable Supply Chains
Besides eco-friendly investments, the government is committed to supporting new technologies and stabilizing supply chains through various initiatives:
- Strengthening tax support for corporate investments by:
- Increasing the deduction rate for investment growth
- Extending temporary investment tax credits
- Prolonging sunset clause for tax credits related to national strategic technologies, including POSCO’s hydrogen-based steelmaking technology
- Reinforcing support for advanced industry infrastructure, including:
- Increasing the budget for specialized secondary battery clusters
- Providing additional funding for water supply facilities and underground brine discharge pipelines in Pohang
- Expanding investments related to supply chain stability through the Supply Chain Stabilization Fund:
- The fund has selected four POSCO Group companies involved in secondary battery materials as leading businesses
- These companies will receive preferential support for their investments aimed at stabilizing the supply chain
Conclusion
Government of South Korea and POSCO are making significant strides towards a sustainable future through hydrogen-based steelmaking investments. Government support and POSCO’s innovative technology position the country well to achieve carbon neutrality in the steel industry. These efforts will also promote economic recovery and growth.
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