green growth posco (1)

8/3/2019 Green Growth POSCO (1)

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Green Growth Strategy of POSCO

March 4th

2010

Executive Vice President

Park, Ki-Hong


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2

Background

Vision of Green Growth

Implementation Plan

1. Green Steel

2. Green Business

3. Green Life

4. Green Partnership

I

II

III

Contents

IV Conclusion


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3

POSCO at a glanceI

History of Creative Management: Ability to Create Something from Nothing

POSCO Overview (09)

Steel Production : Top 3~4th (29.5 Mt)

Employment: 17 thousands employees

Sales : 30Bn USD (3% of GDP, 08)

Evaluations

Davos Forum selected POSCO as GlobalTop 100 company (10.1)

Dow Jones Sustainability Index includedPOSCO as a sustainable leading companyfor 5 consecutive years (09.9)

World Steel Dynamics indicated POSCOas having the world bests competitiveness(WSD, 07)

1980 1990 2007200019701968

3000

2000

1000

Foundation

Pohang worksConstructed

Privatized

NYSE Listed

Gwangyang worksConstructed

FINEXCommercialized

83

92

94

00

07

68

2009

Crude SteelProduction (tons)

- Steel Industry is a core Industry forming the basis of economic growth- POSCO has lead the growth of various Korean industries such as ship-buildingand car-production by supplying basic raw materials.


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4

Challenges facing POSCOI

Rapidly Changing Business Environment of the Steel Industry, bothDomestic and Overseas

Emerging New Paradigm of Low Carbon and Green Growth

Business Environment Low Carbon and Green Growth

Mega Competition- Mega-steel producer emergedthrough M&A

- Accelerated growth of the Chinese

steel companies

War for securing raw materials

- The variability of raw materials andenergy prices

- Big bargaining power of suppliers

Competitive domestic market

- Lower domestic steel demand- Appearance of a new domestic steelproducer in 2010

Carbon-reduction steel production

Emitting twice the amount of CO2for every ton of steel produced


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(WSA, APP, 07.10)

Environmental Characteristics of the Steel IndustryI

Steel industry, one of the vulnerable industries by GHG regulation

- Responsible for 3.2% of the worlds GHG emission (06, World Resource Institute)

- With the growth of the emerging countries, the world steel production will increasecontinuously (2 bn ton by 2020) Pressure for GHG will consequently increase

Energy Intensity1973 = 100

Around 80% increase in energy efficiencyfor the steel industry in 2000, since 1973

(WSA, 08.10)

Around 50% decrease in energy consumptionfor each ton of crude steel produced in 2004,

compared to 1975

However, the steel industry has markedly improved its energy efficiency

compared to other industries, through continuous tech. developments


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Energy-Saving Activities at POSCOI

Invested around 1bn USD to energy recovery facilities from 99 to 08

[ Installation rate of energy recovery facilities among worlds major steel companies ]

* Calculated by the installationratio of 8 major energy recoveryfacilities such as CDQ (Coke DryQuenching), TRT (Top GasPressure Recovery Turbines), etc.

Saved 2.9M TOE (equivalent to 7M ton of CO2 emission) through voluntaryenergy reduction agreement with the government since 1999

Voluntary agreement : 1st (99~03), 2nd (04~08), 3rd (`09~`13)

13,346

98

11,858

1,488

3,653

04

11,135

2,211

4,330

06

10,492

2,854

6,929

08

B.A.U

Usage

: new facilities: existing facilities : Energy saving

12,716

1,549

00

12,334

2,300

02

[Unit: thousand TOE]

Saving

DCB POSCO97%

44%

A E

49% 51%95%

42%


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Green Growth!Not merely a challenge to overcome,

But also an opportunity to find new business opportunities

GHG Emission reduction activities of POSCOI

Amount of CO2 emission per ton of crude steel production

Calculated by WBCSD/WRI guideline

Data may change based on calculation methods

Relative index

(POSCO = 100)

D (India)C (China)B (Japan)A (Germany)POSCO

100 102 103111 111

However, POSCO still occupies around 8.3% of Koreas nationalenergy consumption and 11% of GHG emission.

The steel industry cannot be devoid of the current challenges in terms ofclimate change


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Steel processInnovation

Development ofAHSS* and ultra-light steel, etc.

Fostering newgreen businessesof POSCO family

Green workplace

Green people andCommunity

Carbon off-setprogram

- 9% Reduction of CO2 emission per ton of steel production by 2020(with reference to the levels recorded in the past 3 years)

- Contribution to 14M tCO2 of social CO2 reduction by manufacturing

of high-efficiency steel products and green businesses

Cooperation for carbonReduction Policy(steel division of APP*,world steel association)

Green technologytransfer to SMEs

Green Steel

Vision of POSCO Green GrowthII

To invest 7bn USD to low carbon steel products andgreen businesses by 2018

To supply 87 thousand jobs in the green-related sectors

Green Business Green Life Green Partnership

Global Green Growth Leader

AHSS: Advanced High Strength Steel, APP: Asia-Pacific Partnership on Clean Development and Climate


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Short-term(~15) Mid-term (~20) Long-term (~50)

Green Steel

H2

FINEXFluidized

beds

Nuclear Reactor

Pig Iron

FOG, SNG

-Hydrogen replaces coalas the reducing material

-Dramatic reduction ofCO2 emission

[ Energy Intensity of Steel

Company (POSCO as 100) ]

* APP (09)

100106 108

119 121124

135

-Improve energy efficiencyof current processes-By heat recovery andreuse

Improvement ofEnergy Efficiency

Development ofNew CO2 reduction

Steel Process

Development ofHydrogen

Steelmaking+%+6%3%

FOG: FINEX Off Gas, SNG: Synthetic Natural Gas

Enforcing Steel Competitiveness

through development of energy-efficient and breakthrough technology

III

CEM (Cont. CastingEndless Mill)

-Energy saving of the reheatingstep by connectingtwo separate processes

POSBOP(POSCO Basic Oxygen Process)

-High energy efficient

innovative steelmakingprocess

-Develop new processesto save energy


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Green Steel

* World Average level of blast furnace(1.88 tCO2/tHM) as 100%

FINEX DEMO FINEX 1.5 Mt

106%

1st Target: 93%

Completed: 97% (08.5)

CCS available : 55%

2nd Target: 90%

FINEX, the world first commercialized innovative steel process (07.5),

to lead the low-carbon steel making process

Iron ore finesNon-coking coal

Coal briquett

Fluidizedbed

Hot compactediron

Pig IronMeltingFurnace

Next generation eco-friendly iron-making process allowing the direct use ofcheap iron ore fines and non-coking coal as feedstock without pre-treatment

High energy efficiency and air pollution reduction by use of pure oxygen- SOx 19%, NOx 10%, Dust 52% level compared to blast furnace

Plan to invest around 60M USD for the plant using FINEX gas pressure (~15)

CO2 emission per ton ofcrude steel

III

FINEX


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High-strength

Steel Sheets

EnergyEfficientMagnetic

Steel Sheets

LightingMaterials

Weight reduction and improved fuel efficiency ofvehicles - Secures same strength level with thinner sheets

260 thousand ton CO2 reduction by 330 thousandton of supply (08)- 8 ton CO2 reduction per ton of sheet

Increasing energy efficiency of transformer, electricmotor and generator

1.7M ton CO2 reduction by 0.3M ton of supply (08)- 5.7 ton CO2 reduction per ton of sheet

Initiation of magnesium sheet production (07.7~)- Production Capability : 3 thousand ton/yr Weight of Magnesium : 23% of Steel, 67% of aluminum

Green Steel

Contributing to Social GHG Reduction through Energy Saving Materials

III

Titanium : airplane, vehicle weight reduction, oceanplant (13~)
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Green BusinessIII

SNG Producing synthetic gas from low-quality coal- Integration with the CO2 capture tech.

Investment of ~1.2bn USD for the SNG plant with0.5M ton/yr capacity (~13)* SNG : Synthetic Natural Gas

Installing plants to generate electricity fromincineration of waste source

Projects using sewage sludge (Suwon and Busan)and RDF (Busan and Pohang) are in process

Waste to Energy

Creating marine forests with steel-slag (00 ~ )- Using steel slag generated from the steel making process- With photosynthesis, marine forests absorb CO2

Making bio-fuel from seaweeds

Developing technology to extract raw materials suchas Magnesium, Lithium, etc. from the ocean (09~ )

Ocean ResourcesOcean Bio


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Workplace

Community

SupplyChain

Communication

Riding a Bike campaign

Green TechnologyTransfer to SMEs (07~)

Green Life & Partnership

Encouraging Voluntary Participation of POSCO Employees and

Cooperating with Relevant Organizations

Making GreenOffice

Publication ofCarbon Report(10~)

Operating POSCO Carbon-zero program (09~)

- www.poscocarbonzero.com

III

Participating in WorldSteel Association

Steel task forceof APP(06~)


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Facing the paradigm of low-carbon and green growth,POSCO endeavors to achieve competitiveness as the leading

company of climate change, through development of

Low carbon steel processes and Green businesses.

(1) Expecting around 10bn USD of sales in the green businesses and

creating 87 thousand jobs in green sectors by investing 7bn USD till 2018

(2) Reducing 9% of CO2 emission per ton of steel production by 2020

(based on the average levels recorded in the past 3 years)

(3) Contributing towards 14M ton of social CO2 reduction by high-efficiency

steel products and green businesses

ConclusionIV


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Thank you!

green growth posco (1)

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