BHP and Posco investigate the process of decarbonization of steel

British Australian resource company BHP is investing up to $ 10 million over the next five years to develop technology to reduce greenhouse gas emissions from steel production in partnership with South Korean steelmaker Posco.

The two companies have agreed on an initial pilot and factory test deal to reduce carbon emissions from steelmaking, BHP said today. Joint measures will include exploring ways to optimize coke quality and evaluating storage and use options for captured carbon.

Posco and BHP will also share research on hydrogen-based direct reduction technology, the use of biomass in steel production, and the potential for BHP's carbon offset capabilities to develop carbon neutral steel products.

BHP's investment will come from its $ 400 million climate investment program announced in 2019. BHP and Posco will also work together on carbon reporting in the steel value chain.

Posco and UK-Australian mining company Rio Tinto announced in July this year that they will jointly research and develop technologies to move towards a low-carbon steel value chain.

BHP and Chinese steelmaker China Baowu entered into a five-year partnership last year to focus on developing low-carbon technologies. BHP has entered into similar initial deals this year with Japan's JFE Steel and China's HBIS Group.

The company has set a goal of reducing production emissions to zero by 2050, although it has excluded steel from emissions area 3, as well as emissions from consumers of its products. BHP is the leading producer of metallurgical coal in the world and one of the four largest producers of iron ore.

Offshore metallurgical coal prices are at an all-time high due to reduced supplies and increased demand, especially from China. Offshore iron ore prices fell about 40% from record levels in May this year, as Chinese steelmakers cut production to meet government decarbonization targets.