South Korean steel manufacturer Posco Holdings and chemical company LG Chem are to pilot carbon capture and utilisation technology that converts CO2 from steelmaking into synthetic gas for reuse in industrial processes.
The demonstration project, part of South Korea’s national CCU Mega Project, will see CO2 captured at Posco’s Pohang steelworks and processed using LG Chem’s dry methane reforming technology.
Dry methane reforming combines CO2 and methane to produce synthetic gas, or syngas – a mixture of carbon monoxide and hydrogen – which can be used as a reducing agent in steel production or as a feedstock in chemical manufacturing, including plastics and fuels. Methane is likely to be supplied from natural gas or other industrial sources.
The pilot will begin with a design phase in 2026, followed by construction in 2028 and demonstration operations through to 2030. Posco will lead the project, with technical support from LG Chem and a consortium of national research institutions including Postech, Seoul National University, and the Korea Research Institute of Chemical Technology.
Jongku Lee, Executive Vice-President and CTO of LG Chem, described the partnership as “a turning point where the steel and chemical industries come together to lead the era of carbon neutrality”.
What is South Korea’s CCU Mega Project?
South Korea’s CCU Mega Project, led by the Ministry of Science, is a national initiative to advance CCU technologies in high-emission sectors such as steel, petrochemicals and refining.
The programme supports pilot-scale projects that convert captured CO2 into fuels, feedstocks and other industrial inputs.
Demo projects under the programme are expected to progress in stages, with design beginning in 2026, construction starting in 2028, and trial operations running through to 2030.
Key projects:
- Posco Holdings and LG Chem are piloting a dry reforming of methane process at the Pohang steelworks to convert CO2 and methane into syngas, which can be reused in steelmaking and chemical manufacturing.
- GS Caltex, in partnership with Jeollanam-do and Yeosu City, is developing CO2-derived polyols at its Yeosu Industrial Complex for use in plastics and foams.
Conventional steelmaking relies heavily on coal to extract iron from ore, generating large volumes of CO2 in the process. According to the International Energy Agency, the steel sector accounts for around 7% to 9% of global energy-related CO2 emissions.
CCU technologies offer a potential route to reuse some of those emissions, but scalability remains uncertain. The dry methane reforming process requires a steady supply of both CO2 and methane, high temperatures, and reliable access to low-cost renewable energy. Analysts have also raised concerns about cost-efficiency and the commercial readiness of CCU at industrial scale.
Dry reforming combines two greenhouse gases, CO2 and methane, to produce synthetic gas, but the process is highly energy-intensive and typically requires temperatures above 800°C. This makes it more costly than conventional methods such as steam methane reforming.
The move follows other efforts to reduce steel industry emissions through cleaner inputs and technologies. Last week, Kingspan signed a supply agreement with Spain-based Hydnum Steel to source green steel produced using hydrogen and renewable electricity.
