• The Act on Strengthening the Competitiveness of the Steel Industry and Supporting Its Carbon Neutral Transition (the “K-Steel Act”), passed by the National Assembly on November 27, marks Korea’s first formal commitment to steering its steel industry toward a low-carbon transition through institutional government support. With concrete implementation tools such as a Prime Minister-led Special Committee and the designation of low-carbon steel industrial zones, the Act makes the definition of low-carbon steel products and low-carbon steel technologies a decisive factor for the industry’s future competitiveness.

• Although the low-carbon steel market is still emerging, its direction is clear. Major demand-side initiatives such as the First Movers Coalition and SteelZero have committed to sourcing a significant share of their steel as low-carbon steel by 2030, while European producers including Stegra and SSAB plan to commercialize hydrogen-based steel production by the late 2020s. In practice, EU CBAM, the First Movers Coalition, and SteelZero already function as de facto global benchmarks, benchmarks that Korea’s dominant BF-BOF production route does not meet.

• By 2030, three production pathways are realistically viable in Korea and could be recognized as low-carbon steel technologies: the blast furnace–electric arc furnace (BF-EAF) hybrid route, POSCO’s hydrogen-based HyREX technology, and DRI-based electric arc furnace production (DRI-EAF). The BF-EAF hybrid route benefits from existing asset utilization but carries the risk of failing to meet international cleanliness thresholds. HyREX offers the strongest performance in terms of carbon intensity and technological sovereignty, but entails the highest costs among mitigation technologies and requires a substantial and sustained supply of clean hydrogen. The DRI-EAF route is more cost-competitive than HyREX and meets the carbon-intensity requirements of most international demand initiatives, but faces challenges related to the establishment of a DRI supply chain.

• Current transition discussions within Korea’s steel industry tend to focus heavily on HyREX. However, a singletechnology strategy is ill-suited to the pace of change in global markets. Multiple technology options, including DRIEAF, should be formally recognized as low-carbon steel technologies in order to build a strategic portfolio. In particular, DRI-EAF can leverage already-commercialized gas-based DRI supply chains, enabling rapid scale-up and accelerating Korean steelmakers’ entry into low-carbon steel markets. The K-Steel Act should clearly articulate such multiple technology pathways and play an institutional role in enabling timely transition investments. It should also be designed in alignment with the government’s forthcoming K-Green Transformation (K-GX) comprehensive plan, ensuring consistency with national industrial transition roadmaps for power grids, hydrogen infrastructure, and related systems.