South Korean steelmaker POSCO and Japanese automaker Honda announced the start of a comprehensive partnership agreement to achieve carbon neutrality.

Posco Group Chairman Choi Jeong-woo and Honda President Toshihiro Mibe attended the signing ceremony at the Posco Center in Seoul.

Based on the agreement, discussions will revolve around environmentally friendly steel for carbon neutrality, the implementation of ultra-high strength steel sheets, which will help reduce vehicle weight, and non-motor electric steel sheets, beyond the current supply of automotive sheets.

In addition, it is about the use of electric steel plates in the mass production of drive motors for electronic axles (axle electric drive systems).

The companies also agreed to cooperate in collecting battery materials and establishing a recycling system.

Earlier, POSCO Group intends to invest $40 billion in environmental projects in Australia by 2040. It was announced by the company’s general manager, Choi Jeong-woo, in a meeting with Australian Prime Minister Anthony Albanese. The investments will be directed at building green hydrogen production facilities.

In addition, in September 2022, POSCO announced plans to invest $14 billion in reducing carbon emissions, and the company plans to build two electric arc furnaces (EAFs) at its factories in Guanjiang and Pohang, scheduled to be launched in 2025 and 2027, respectively.

Electric arc furnaces will replace blast furnaces (BFs) which will be closed since POSCO only uses electric arc furnaces to produce some products, such as stainless steel.