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How South Korea can become the home of net zero steel

29 December 2023, 9:00 UTC 2 min read

Brian Voldsgaard, Head of Ocean Asset Partnerships, Maersk

Steel is central to South Korea’s economy. We use it to build cars, buildings and ships – and South Korea’s future, with manufacturing producing 28% of GDP.

But steel production also harms the planet, and is responsible for almost 40% of South Korea’s industrial greenhouse gas emissions. To reach carbon neutrality, we need to decarbonise steel production.

Fortunately, South Korea has a unique opportunity to become a world leader in low emission steel. Change is underway: the South Korean government has created a ₩150 billion fund in support, and Korean steelmakers are pledging to reach carbon neutrality by 2050.

As a leader in the global shipping and logistics industry, Maersk recognises the urgent need for decarbonisation - and the role our industry can play. South Korea is the second biggest shipbuilder globally, and 99.7% of imports and exports are transported by ships.

Maersk has an ambitious 2040 target of net zero greenhouse gas emissions. We are gradually renewing our fleet - by 2030, at least 25% of our Ocean cargo will use green fuels. Our ship Laura Mærskthe world’s first methanol-enabled container vessel, was built at Hyundai Mipo Dockyard in Ulsan, and we have since ordered 19 more from Hyundai Heavy Industries. 

But the steel used in ships is still a significant source of emissions. That’s why we decided to join SteelZero – a global initiative of companies committing to procure 100% net zero steel by 2050 – coordinated by Climate Group, the organisation behind RE100.

We’re using our purchasing power to support Korea’s transition to low emission steel. Since joining SteelZero, we’ve collaborated to improve steel circularity and ensured our steel procurement enables our net zero target.

Collaboration between businesses in Korea is key. For example, POSCO has partnered with renewable energy company Ørsted - another SteelZero member - to expand offshore wind and green hydrogen development to decarbonise steel. Working closely with other SteelZero members and suppliers enables us to tackle structural change across the value chain. 

Global demand for low-carbon assets could trigger $3.5 trillion in new spending annually by 2050. Additionally, over half of South Korean-produced steel is bought by Korean businesses. By procuring 100% net zero steel by 2050, South Korean businesses can create a thriving market for net zero steel, accelerate carbon neutrality, and become the home of net zero steel.

*This article was originally published on Seoul Economic Daily.