Hyundai breaks ground on Louisiana steel mill. Is it green enough?

Hyundai is set to break ground in southern Louisiana this week on a nearly $6 billion steel mill, which may become the lowest-carbon facility of its kind in the U.S.

On Friday, the Korean industrial giant will hold a ceremony at the project site, where the fields of a former sugarcane plantation have been cleared for the major work ahead. Hyundai’s plant will initially run on natural gas when it opens in 2029 — making it significantly less carbon-intensive than the aging coal-fueled mills that produce most of America’s automotive steel.

Yet the facility is hardly a perfect blueprint for decarbonizing steel production, given that it will still produce planet-warming emissions and other harmful air pollution.

Most of the Louisiana plant’s emissions will come from the gas-burning furnace that turns iron ore into direct-reduced iron — which then gets melted into steel in an electric arc furnace. The project is one of several huge new developments in Ascension Parish, where rural communities along the Mississippi River are increasingly being hemmed in by industrialization.

“Even though Hyundai has tried to sell this as a clean and green project, we know from their own numbers that this facility would be a major source of just about every type of pollution that the state regulates,” said Kimberly Terrell, a New Orleans–based research scientist with the Environmental Integrity Project’s Center for Applied Environmental Science.

That pollution includes emissions of nitrogen oxide, particulate matter, and sulfur dioxide, each of which is known to cause respiratory problems and other serious health issues, she told reporters ahead of Friday’s groundbreaking.

Terrell said she believes the plant’s draft environmental permit downplays the steel mill’s potential impacts on nearby air quality. Local residents have also voiced concerns that the project is moving forward before the Louisiana Department of Environmental Quality has the chance to rigorously review and issue a final air permit.

“Development should improve our communities, not leave families wondering what the long-term cost will be to their children,” said Courtney Harris, a program manager for Rural Roots Louisiana and a resident of Donaldsonville, the nearest city to Hyundai’s steel mill site.

Hyundai-Posco Louisiana Steel, the U.S.-based subsidiary of Hyundai Steel, said the company has ​“made every effort to ensure that our project meets environmental standards and complies with all applicable regulatory requirements. We respect the permitting process and will continue to follow all required procedures as it moves forward,” according to Ascension Business Report. (Hyundai didn’t return Canary Media’s request for comment.)

The steelmaker could drastically reduce both air and carbon pollution in Louisiana by replacing the gas with green hydrogen — which is made from renewable electricity and water, and whose only byproduct is water vapor. When Hyundai first unveiled the project in early 2025, it indicated the plant would use the carbon-free fuel and become a ​“catalyst for the hydrogen ecosystem” in the Bayou State.

However, Hyundai’s plans for switching to hydrogen remain nebulous, and the broader market for green hydrogen continues to face major cost and logistical hurdles. The manufacturer has offered little clarity about its hydrogen ambitions in its state permit applications and in previous responses to Canary Media.

But Hyundai’s gas-fueled mill will nevertheless be much cleaner than traditional coal-based steelmaking. The company says its steel products will have a carbon footprint that’s 70% lower than those produced using conventional methods.

That may be the best the U.S. can get right now, experts say.

Earlier efforts to pursue hydrogen-based steelmaking have stalled in the face of economic headwinds and the Trump administration’s hostility toward clean energy. Cleveland-Cliffs, which got a $500 million Biden-era grant to install hydrogen-ready technology, says it will instead use the funding to upgrade a coal-fueled blast furnace in southern Ohio.

As manufacturers look to boost domestic steel production — driven by tariffs and increasing demand — they’re primarily planning to build gas-fueled ironmaking furnaces like Hyundai’s.

U.S. Steel, for example, says it will invest nearly $2 billion to build a direct-reduced-iron plant at its Big River Steel site in Arkansas, where four electric arc furnaces already melt down scrap steel. In Minnesota, the mining company Mesabi Metallics is considering installing such a furnace at its giant operation in the Iron Range.

“The industry is naturally moving towards [direct-reduced-iron] based production for cost and efficiency reasons, leveraging low-cost natural gas that we have in the United States,” said Nick Yavorsky, a senior associate on the iron and steel team at RMI, a clean energy think tank.

“We’re still not at the point where hydrogen-based steelmaking is cost-competitive with incumbent fossil methods,” he said.

Even so, new facilities can be designed in ways that avoid locking companies into using natural gas for decades and help ease the transition to hydrogen, Yavorsky wrote in a July analysis with Kaitlyn Ramirez, who leads the RMI team. That could include leaving land available for hydrogen-producing electrolyzers and working with utilities early on to secure renewable energy supplies — as well as taking cues from Hyundai’s project, which will deploy hydrogen-ready furnace technology and electrify certain steps of steel processing.

“Planning for flexibility [around hydrogen] will ultimately have the potential to position the U.S. as a real leader in this space,” Ramirez said.