POSCO plans to spend nearly $42 billion globally by 2026 to decarbonize business

South Korea's POSCO Group plans to spend Won 53 trillion ($41.9 billion) globally by 2026 to make its business more environmentally friendly and sustainable, the company said May 26.

Of the overall investment, Won 33 trillion will be spent in South Korea, of which Won 20 trillion will be used for eco-friendly steel production, better known as "green" steel.

The Won 20 trillion will be used to build a new electric arc furnace, introduce "eco-friendly facilities, and strengthening of steel product technology for electric vehicle motors," it said.

The massive investment falls in line with the group's establishment of POSCO Holdings on March 2 whose main goals are to map out future business, research and development, and investment. The steelmaking business was vertically spun off as POSCO.

By the end of 2022, the steelmaker plans to make a decision on building an EAF "in order to meet the demand for low-carbon products."

Also, POSCO plans to quadruple its production capacity of high efficiency non-oriented electrical steel sheets to 400,000 mt/year in 2025 to meet demand from manufacturers of EVs and luxury home appliances.

The steelmaker aims to spend Won 12 trillion to boost its overseas crude steel production capacity to 23.1 million mt/year by 2030, a nearly fivefold spike from 5.1 million mt/year in 2021.

Overall, POSCO plans to raise its global crude steel production capacity to 68 million mt/year in 2030 from about 46 million mt/year in 2021.

Additionally, the company will increase its competitiveness in eco-friendly materials such as battery materials and hydrogen and related technologies.

About Won 5.3 trillion will be used to secure a stable supply of raw materials, expand production plants and obtain next-generation technologies.

On May 18, the group hiked its 2030 production targets for secondary battery materials by as much as 57%. Cathode output is now expected to reach 610,000 mt/year by 2030, up 45% from the 400,000 mt/year previously projected last December, which group company, Posco Chemical, is tasked with achieving.

Also, anode production was revised 23% higher to 320,000 mt/year, lithium output by 36% to 300,000 mt/year and nickel 57% higher to 220,000 mt/year.

POSCO plans to use green hydrogen to replace coal in steelmaking, estimating a need for 3.7 million mt/year of the gas. It also wants to become a major producer and supplier of hydrogen, manufacturing 5 million mt of green hydrogen by 2050.