SEOUL -- South Korea's steel group POSCO has tied up with its Australian raw material supplier, Roy Hill Holdings, to establish a cooperative system for the reduction of carbon emissions, ranging from the production of hydrogen and joint research into hot briquetted iron, which is a briquetted form of direct reduced iron with high iron content.
The two companies agreed on joint research to develop an optimal hot briquetted iron (HBI) production system. Normally, furnaces use coal as a reducing agent to separate oxygen from iron ore. HBI produces steel products after making reduced iron without carbon dioxide emissions by using hydrogen as a reducing agent.
POSCO holds 12.5 percent of Roy Hill Holdings, which is involved in an iron ore mining project in the Pilbara region of Western Australia, and imports 16 million tons of iron ore annually. The Roy Hill mine is Australia's largest single mine, with an iron ore reserve of 2.3 billion tons.
"We hope that the commercialization of hydrogen-reducing steel by utilizing POSCO's world-class steel technology and Roy Hill's mining expertise will provide an important turning point in achieving carbon neutrality," POSCO's steel sector head Kim Hak-dong said in a statement on August 2 after the two companies held an online ceremony to sign a memorandum of understanding.
POSCO and Roy Hill would seek the production of blue hydrogen using Australian natural gas and the establishment of a green hydrogen production base in the long run. They would work on the development of technology to capture, utilize and store carbon that occurs during blue hydrogen production.
Blue hydrogen is derived from natural gas with carbon capture technology while green hydrogen is produced from water using renewable power. POSCO nurtures green hydrogen as one of its new growth engines. The group aims to produce up to 500,000 tons of blue hydrogen by 2030 and complete a five-million-ton green hydrogen production system by 2050.
POSCO has stepped up efforts to decarbonize and reach net-zero carbon emissions by 2050. In July, the steel group joined hands with Rio Tinto, the world's second-largest metals and mining corporation, to develop and demonstrate technologies for their transition to a low-carbon emission steel value chain.
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