The introduction of policies supporting green hydrogen production is an essential condition for achieving national carbon neutrality goals, ensuring energy security, and strengthening industrial competitiveness. The competitiveness of key industries such as steel will depend on their ability to produce low-carbon, high-value-added products. Without comprehensive support for low-carbon fuels like green hydrogen and renewable energy, South Korea's industry will remain reliant on fossil fuels and risk becoming uncompetitive.

The domestic expansion of hydrogen-reduced ironmaking can accelerate the realization of Korea's hydrogen economy, strengthen energy security, and contribute to job creation and regional economic development through new infrastructure construction. Currently, the government plans to increase domestic self-sufficiency in clean hydrogen by importing hydrogen produced overseas. However, it has proposed an underestimated price for imported hydrogen, failing to accurately estimate the liquefaction and transportation costs required for importing hydrogen.

This research shows that if green hydrogen required for hydrogen-reduced ironmaking is produced and procured overseas, the production cost per ton of hydrogen-reduced ironmaking is projected to be KRW 220,000 (USD 159) higher in 2033 and KRW 590,000 (USD 428) higher in 2050 compared to using domestically produced green hydrogen.

Even if domestic green hydrogen prices are optimistically projected to decline, it is estimated that an additional cost of approximately KRW 300,000 (USD 217) per ton of steel will be required for hydrogen-reduced ironmaking compared to the blast furnace-converter process by 2050. However, this cost could be partially or fully offset through policies such as expanding renewable energy to reduce PPA prices, supporting the production and purchase of renewable energy for electrolysis, and expanding the market for low-carbon steel products.