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Headquartered in Incheon, South Korea, Hyundai Steel is the world’s 18th largest, and South Korea’s 2nd largest, steel producer. In 2023, the company produced 19.24 million tons of steel. As of January 2024, Hyundai Steel had a market capitalization of 3.3 billion US dollars. 

Hyundai Steel is the steelmaking unit within the Hyundai Motor Group, and is owned by Hyundai Motors and Kia. In 2010, the Group started its blast furnaces in Dangjin, South Chungcheong Province, South Korea, to meet growing demand for automotive steel sheets from the Group’s main automotive producers: Hyundai Motors and Kia. Hyundai Steel supplies over 83% of the automotive steel it produces to Hyundai and Kia. The remaining 17% is supplied to overseas automakers, with the company aiming to expand their global supply. 

Hyundai Steel currently operates steel manufacturing facilities in Dangjin, Incheon, Pohang, Suncheon, and Ulsan in South Korea. Globally, Hyundai Steel has 19 overseas subsidiaries and 10 offices in 14 countries, including the United States, China, and India. 

CAMPAIGN TIMELINE

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Campaign Launch

On January 23, we launched our report REthinking Hyundai’s Eco Steel: How fossil fuels threaten the brand. ASL’s analysis shows Hyundai Steel has made no commitment to renewable energy or green hydrogen. Its emissions are growing and Hyundai Steel has one of the least ambitious emissions reduction targets amongst its Japanese, European, and US competitors.

PROBLEM

Why steel?

Steel production is responsible for at least 10% of global energy-related CO2 emissions and the steel industry is the second largest carbon emitter among heavy industries. The steel sector has a key role and responsibility to lower its emissions to mitigate the effects of climate change felt around the world.

Why Hyundai Steel?

Hyundai Steel promotes itself as a sustainability leader. Yet, their emissions in recent years say otherwise. From 2021-2023, the company saw a 2.7% increase in emissions, reaching 29.3 million metric tons of CO2. This is despite the company declaring to achieve carbon neutrality by 2050.

The majority of Hyundai Steel’s greenhouse gas emissions are generated from coal-burning steelmaking technology called blast furnaces. This is evident as 91% of their emissions come from Dangjin Steelworks, a steel plant where three large blast furnaces are operational.

Hyundai Steel has no plans to address its reliance on coal-dependant blast furnaces. The steelmaker pledged to cut 12% of its greenhouse gas emissions by 2030, from a 2018 baseline — a target that is not aligned with a 1.5ºC strategy. It also lags significantly behind the plans of its EU and Japanese competitors, such as SSAB and Nippon Steel’s plans to cut emissions between 30% and 50% by 2030.

Nor has Hyundai Steel made any commitment to renewable energy and green hydrogen use. Our recent ranking of major global steelmakers’ renewable energy use found that Hyundai Steel ranked joint-last with fellow South Korean steel maker Dongkuk Steel. Hyundai Steel has declared zero renewable energy use in 2022 and 2023 and provided no details of current renewable energy projects or corporate power purchase agreements.

Renewable energy and green hydrogen are critical to steel decarbonization. Instead of investing in proven technology, Hyundai Steel has announced that it will continue to use fossil fuels and rely on an untested technology called Carbon Capture and Storage (CCS) to catch dangerous emissions from its operations and bury them underground.

The company’s commitment to fossil fuels was made clear in March 2024, when it announced a KRW 800 billion (approximately USD 580 million) investment in the construction of a new, 499 megawatt (MW) gas power plant at Dangjin Steel Works. Hyundai Steel says that this gas plant will deliver a reduction in its emissions, but ASL analysis indicates that the plant will significantly increase emissions compared to the electricity grid, by approximately 410,216 tonnes of carbon dioxide equivalent (tCO2eq) per annum in 2030.

SOLUTION

As South Korea’s second largest steelmaker and as a major electricity user with high political influence, Hyundai Steel has the power to lead an industry-wide transition to green steel: that is, steel manufactured using renewable energy, green hydrogen and iron and electric arc furnaces.

Hyundai Steel is also perfectly positioned to help drive demand for green steel. As part of a conglomerate with the world’s third largest automakers, Hyundai Motors and Kia, Hyundai Steel can work with its major customers to accelerate the transition in the wider Korean steel industry.

Hyundai Steel can become a climate leader in its industry. In order to do so, it must take the following steps:  

  • Join RE100 and commit to powering current and future EAFs with wind and solar.
  • Adjust emissions reduction targets to at least 30% by 2030 on a 2018 base year. Extend this target to include a Paris-aligned, near- and medium-term Scope 3 emissions reduction target.
  • Release a public commitment to no new blast furnaces, no relining of existing blast furnaces, and no new fossil fuel infrastructure.
  • Release a clear plan, with interim targets, for retiring existing blast furnaces to deliver on 2050 net zero commitments.
  • Produce or source iron inputs made with 100% green hydrogen, rather than coal or gas, by 2050.

Given steel companies’ large energy use and political influence, immediate steps from Hyundai Steel and its peers to purchase credible amounts of renewable energy would unlock significant momentum in wind and solar markets — particularly in constrained energy markets like South Korea and Japan. With a high percentage of Electric Arc Furnace production, Hyundai Steel is positioned to lead the wider steel industry transition, which, crucially, would lead to a significant reduction in global emissions.

There is currently no major steelmaker that is a member of RE100 — the global corporate initiative for companies committed to 100% renewable energy. By making such a commitment, and publishing a clear plan to transition from coal and gas to green hydrogen and renewable energy-based technology, Hyundai Steel can provide a stable and credible foundation for the wider steel industry’s decarbonization pathway.

OUR REPORTS

 
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REthinking Hyundai’s Eco Steel: How fossil fuels threaten the brand

OUR PRESS RELEASES

 
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Hyundai Motor Group’s Eco-Friendly Steel Brand Faces Greenwashing Risks

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