Trade, Industry and Energy Minister Lee Chang-yang, center in the front row, poses with representatives of domestic steelmakers at a Seoul hotel on February 16 after signing an agreement to create a 150 billion won fund to help cut carbon emissions in the steelmaking process. [Yonhap]
The ministry announced the plan on February 16 as part of a steel industry development strategy to promote steelmakers' transition to a low-carton production structure.
The creation of the fund is aimed at coping with the Carbon Border Adjustment Mechanism (CBAM) adopted by the European Union (EU) to impose a carbon tariff on carbon intensive products such as cement and steel products. It is also designed to improve the competitiveness of the local steel industry and boost steel exports in the face of a global supply glut.
Trade and Industry Minister Lee Chang-yang signed an agreement with seven major steelmakers, including POSCO and Hyundai Steel, to establish the fund and step up private-public cooperation to cut carbon emissions in the steelmaking process.
To promote the low-carbon transition, the ministry plans to replace 11 coal-fueled blast furnaces with 14 hydrogen-powered ones by 2050. It has also vowed to complete the development of hydrogen furnace technology by 2025.
A ministry official said the establishment of the fund is necessary to tackle the global trend of regulating carbon emissions, as seen in the EU's CBAM scheme. He said the world is witnessing a new global trade order which calls for companies to move toward carbon neutrality.
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