Hyundai’s new steel mill sparks hopes and fears in Louisiana

On a drizzly March day last year at the White House, President Donald J. Trump stood behind a podium to make a ​“beautiful announcement.” Hyundai, the Korean industrial giant, was investing nearly $6 billion in a new steel plant in Louisiana, which would supply domestic metal to the company’s auto plants in Alabama and Georgia.

Hyundai executives flanked Trump as he spoke, as did top Republican policymakers and Louisiana’s governor, Jeff Landry, who stood out among the sea of navy suits in his cornflower-blue attire. Trump praised his own administration’s tariff policy for driving Hyundai’s investment in U.S. manufacturing, and Hyundai officials touted the jobs they’ll bring to the Bayou State.

But one important detail went unmentioned: The new plant may be the lowest-carbon iron and steel mill the United States has ever built. 

Traditional steelmaking is highly polluting, responsible for up to 9% of the world’s greenhouse gas emissions. Unlike the hulking furnaces that launched America’s steel industry in the late 19th century — some of which are still cranking across the Midwest — the Louisiana facility won’t rely on coal to produce the sturdy metal. 

Last summer, the company indicated its steel mill would use hydrogen — a carbon-free fuel that can be made cleanly from renewable electricity and water. The project would become a ​“catalyst for the hydrogen ecosystem” in Louisiana, executives told state leaders, while helping Hyundai meet the growing global demand for sustainably produced steel.

This was good news for anyone who cares about climate, coming at a moment when other U.S. efforts to decarbonize the steel industry had stalled in the face of economic headwinds and the Trump administration’s antipathy toward climate policy. The companies SSAB and Cleveland-Cliffs were each slated to receive $500 million in federal funding for hydrogen-based steelmaking under the Biden administration, but they later abandoned those plans.

A green-hydrogen steel mill would be ​“a chance to change not just the industrial landscape of Louisiana, in terms of what types of industries are here, but also to advance the broader clean energy transition in the state,” said Kelvin Wells Jr., an industrial organizer with Sierra Club’s Delta Chapter who lives in Baton Rouge, the state capital.

But whether Hyundai will fulfill its hydrogen ambitions remains an open question.

In permit fillings, the company stated the steel mill will use natural gas when it starts operating in 2029, and Hyundai confirmed this plan to Canary Media. The firm also said it will capture and store the carbon dioxide emissions the plant produces from the get-go. The combined approach can slash the carbon footprint of coal-based steelmaking by as much as two-thirds — but it’s still more polluting than using hydrogen from renewables, and is sure to face opposition from carbon-capture’s critics.

Asked when the company will transition to using green hydrogen, a representative said, ​“It is difficult to pinpoint when hydrogen will become economically viable.” 

Meanwhile, residents in Ascension Parish, where the facility is being built, have their own questions about the project. Their community is already stacked with petrochemical plants and oil refineries that have turned the rural region between Baton Rouge and New Orleans into ​“Cancer Alley.” They hope the steel mill will offer an alternative to those dirty facilities, and they want assurances that the steelmaker will deliver on its promises. So far, locals say the company hasn’t responded to their requests for talks.

As Hyundai begins transforming the grounds of a former sugarcane plantation into an industrial site, community members and climate advocates are watching the project closely to see what happens next.

The nearest city to Hyundai’s steel mill site is Donaldsonville, about an hour’s drive west of New Orleans and home to some 7,000 people. 

Glenn Price, who leads a neighborhood group, has seen this rural corner of south Louisiana change dramatically over time, as manufacturers arrived to turn the Gulf Coast’s abundant oil and gas resources into fuels and chemicals that the rest of the world depends on.

I met Price in May at the public library in Donaldsonville’s historic district, a 50-block area where clapboard homes line quiet streets, and a wide, grassy levee separates the town from the winding Mississippi River. Founded in 1806, Donaldsonville was briefly Louisiana’s first state capital and, in 1868, elected the nation’s first Black mayor: Pierre Caliste Landry, who was born into slavery on one of Ascension’s largest plantations. 

Present-day Donaldsonville has a poverty rate that’s among the highest in Louisiana, despite the recent influx of factories. Price said he’s skeptical that Hyundai’s project will provide good jobs for residents, since other facilities often employ out-of-towners, and given Hyundai’s record of worker-safety and labor issues in U.S. auto plants. He worries that the steel mill won’t be any better for people’s health than other nearby facilities.

That’s why he joined the grassroots group Good Neighbors Louisiana. The coalition is pushing Hyundai to crystallize its plans — for curbing pollution, using green hydrogen, and protecting workers — in a legally binding ​“community benefits agreement,” and it is calling on the state to conduct an environmental justice analysis. Not long after my visit, the group claimed a win: Hyundai said it would switch nine gas-fired heaters in parts of its operation to cleaner electrified equipment; the change will ​“reduce emissions of pollutants,” the company explained by email.

“We can’t stop people coming in — we don’t have the might. So you have to have a plan B,” Price told me inside the small, hushed library. ​“If they’re going to come in, then we want them to make sound commitments to us. We want the best that we can get.”

Donaldsonville is surrounded by emerald fields of sugarcane and rice paddies dotted with orange crawfish traps. But signs of its modern industrial identity are impossible to miss. Driving west over the Sunshine Bridge earlier that day, I saw silver spires and grayish plumes rising from CF Industries’ ammonia-production plant. It’s the biggest fertilizer factory in the world — and also Louisiana’s largest source of planet-warming emissions and toxic air and water pollution. The imposing complex sits within sight of a primary school and the local Walmart.

As I headed toward the rural village of Modeste, the factory shrank into the distance, replaced by farmland owned by the descendants of slaves and sharecroppers. Hyundai, CF Industries, and other firms are collectively planning to develop a 17,000-acre industrial hub, called the RiverPlex MegaPark, in this area.

I pulled over my rental car — a Hyundai Kona, as it happened — when I came across the temporary sign for Hyundai America. Stepping into the broiling sun, I took in the preliminary site work: leveled ground, piles of dirt, fleets of excavators and dump trucks. At full tilt, Hyundai’s steel mill is expected to churn out 2.7 million metric tons of metal per year on its 1,700-acre property. Posco, another major Korean steelmaker, is set to invest $582 million and take a 20% stake in the operation.

Details about Hyundai’s work and the bigger industrial park are hard to come by, especially for the Modeste residents who fear being displaced.

At least 10 elected leaders in Ascension have signed nondisclosure agreements with Louisiana Economic Development, a state agency. The practice reportedly allowed state officials to privately negotiate a sweeping $2.6 billion incentive deal for Hyundai’s project. The level of secrecy is becoming commonplace in Gov. Landry’s Louisiana, though local environmental groups are suing to stop it. The state agency defended its use of nondisclosure agreements, calling them a ​“standard part of economic development projects” across the country.

“By engaging local elected officials early while protecting sensitive business information during negotiations, Louisiana is able to compete for transformational projects that create opportunity, grow wages, and strengthen communities across the state,” a spokesperson for Louisiana Economic Development said by email.

Ashley Gaignard, a Donaldsonville resident and president of Rural Roots Louisiana, questioned why project details have been kept secret if they’re in the public’s best interest. ​“I would love to see my community thrive,” she said. ​“I just don’t want to do it at the cost of risking our water, our air, our lives.”

Deletrick Dickerson, who lives in the parish, said that while he’s wary of the larger RiverPlex expansion, Hyundai’s steel mill in particular could have a ​“phenomenal” impact if it employs people within the predominantly Black, economically distressed towns that trace the western bank of the Mississippi. 

Dickerson works at the Atalco alumina refinery in neighboring St. James Parish and is a safety representative for his United Steelworkers local union. He also advocates for the union on other urgent political matters. He and I met after my drive to Modeste near the state Capitol building, in Baton Rouge, where he had spent the previous night rallying against a congressional redistricting bill that would eliminate one of Louisiana’s two majority-Black districts. The measure passed at 4:30 a.m.

The Hyundai project is another kind of fight for communities, he said later that afternoon, warding off fatigue. ​“We just want everything to be on the up-and-up.”

Hyundai-Posco Louisiana Steel, the U.S.-based subsidiary of Hyundai Steel, addressed the community’s environmental and labor concerns in an email to Canary Media.

The steelmaker is using advanced technologies ​“to minimize emissions of harmful and toxic substances. The project is designed to comply with all applicable environmental regulations and permit requirements,” a representative said. The company plans to ​“prioritize hiring local residents to the greatest extent possible. Safety will be our top priority, and HPLS will be prepared and operated with the highest safety standards.”

For all the uncertainty surrounding Hyundai’s hydrogen future, one thing is clear: It won’t be like the aging steel mills that operate from Illinois east to Pennsylvania. 

Those facilities consume lots of coal in scorching-hot blast furnaces to turn raw iron ore into iron. The molten metal is then transported into a basic oxygen furnace, which removes impurities to make steel. The mills produce most of the high-performance steel that U.S. auto manufacturers need for car bodies and engine parts. They are also responsible for the vast majority of carbon emissions and toxic air pollution associated with steelmaking.

The Louisiana plant will be the first new U.S. steel mill to combine two alternative furnace technologies into one relatively lower-carbon facility.

To produce the iron, the company will install a direct reduction furnace, which can use natural gas or hydrogen, or a combination of the two. Three such facilities already operate in the United States — all of them fueled by gas — including Nucor’s sprawling operation near the community of Romeville, Louisiana, across the river from where Hyundai’s steel mill is being built. At the Nucor site, an impossibly long conveyor belt travels overhead to move the iron onto river barges that ship the metal to other states.

Hyundai’s project, by contrast, will feed iron directly into two electric arc furnaces. Over 150 of these power-hungry furnaces exist nationwide. But they primarily melt down scrap metal, with some virgin iron, into shiny new steel. Hyundai will mostly supply its own iron for the electric arc furnaces, enabling it to form steel sheets with the right qualities for vehicle production.

Hyundai has been making steel in South Korea since the 1950s. But with the Trump administration’s tariffs raising the cost of importing steel and cars, the manufacturer has opted to boost its U.S. production in both sectors. Building a new coal-fueled blast furnace in the United States makes little economic sense, given the expense of using coal and complying with environmental regulations. And there’s no need to — not when Louisiana can offer plentiful supplies of cheaper natural gas.

Eventually, the company intends to sell its Louisiana-made steel to other automakers in the U.S. and internationally. The global market is increasingly calling for lower-carbon steel, through policies like the European Union’s carbon border tax and because of broader consumer interest. Hyundai itself is facing pressure to decarbonize under South Korea’s carbon-neutrality targets.

“This project is not just about producing steel — it’s about producing a better future,” Hyeongjin Kim of Hyundai Steel told Louisiana leaders last year in Baton Rouge.

In May, Hyundai signed a $650 million supply contract with the Italian company Danieli for the two electric arc furnaces and other key steel-manufacturing equipment. The deal also includes an Energiron direct reduction plant, jointly developed by Danieli and the Italian firm Tenova, which is similar to the one Nucor operates in Louisiana. 

“This is state-of-the-art, latest technology,” Andrea Diasparro, Danieli’s group sales director and a member of its executive board, said by phone from his office in Buttrio, Italy. 

He added that the equipment is designed to limit energy consumption across Hyundai’s operation. The direct reduction furnace has built-in capabilities to capture carbon dioxide emissions, which Hyundai said it will utilize during its initial operations. The plant is also designed to seamlessly transition from using gas to hydrogen to produce the iron.

“No additional equipment has to be implemented for the plant to be hydrogen-ready, in the case that hydrogen is available at a reasonable price,” he said.

The question of when Hyundai will use green hydrogen, if ever, weighs heavily on Angelle Bradford Rosenberg, a medical scientist who leads the Sierra Club’s Delta Chapter. She met with me, her colleague Wells, and Dickerson — all members of the Good Neighbors Louisiana coalition — at a bar in downtown Baton Rouge the afternoon after the combative redistricting hearing.

“There’s no mechanism in Louisiana for watchdogging that sort of thing,” Bradford Rosenberg said. ​“We need those commitments from corporations in the beginning, because we cannot trust that it will come later.”

Hyundai outlined its hydrogen ambitions last year during meetings with Louisiana’s Clean Hydrogen Task Force, as part of an 18-month initiative created under former Gov. John Bel Edwards, a Democrat. The group included legislators and industry experts, who made policy recommendations for boosting production of the lower-carbon fuel within the state.

Louisiana makes millions of tons of conventional hydrogen every year for use in the chemicals sector, through a dirty and energy-intensive method that breaks the hydrogen-carbon bond in methane from natural gas. 

The industry has plans to clean up by capturing its CO₂ emissions and storing them permanently underground — producing so-called blue hydrogen — with a few such projects underway. In meetings, Hyundai gave the impression that it would start by using blue hydrogen in its ironmaking furnace. It would have a convenient source: CF Industries is developing a $4 billion blue ammonia plant next door that could also make hydrogen and bury emissions beneath Ascension Parish.

Whether this is a good idea depends on who you ask. The Sierra Club and local groups like Rural Roots and Louisiana Bucket Brigade — and, increasingly, Republican state policymakers — are vehemently opposed to injecting CO₂ into underground wells, given their concerns about public safety risks and potential emission leaks. Critics also don’t like that it prolongs industry’s reliance on fossil fuels, and all the harmful emissions that entails.

On the flip side, the nonprofit Clean Air Task Force generally considers carbon capture and storage, or CCS, to be a ​“safe, permanent, and essential pathway” to curbing industrial emissions. By including CCS in its initial plans, the Hyundai steel mill could help create the supply chains and infrastructure needed to develop blue hydrogen, eventually driving down the costs for hydrogen made with renewables.

“We really see CCS-enabled hydrogen as a way to jump-start the economy and lead us into electrolytic [green] hydrogen in the future,” Lindsay Cooper Phillips, the senior Gulf Coast policy manager for the Clean Air Task Force, told me over coffee in Baton Rouge. ​“It’s challenging for someone like Hyundai to just start off there.”

Hyundai has indicated that it could later switch to using green hydrogen, which is made by running electrolyzers — powered by renewable electricity — to split water into hydrogen and oxygen. This is considered the cleanest form of the fuel, because it doesn’t directly emit carbon. It also eliminates the harmful air pollution that comes with burning natural gas, including smog-producing compounds and fine particulates, which can damage people’s hearts and lungs.

A handful of global steelmakers have started using hydrogen in their operations. But the world’s first commercial-scale green steel mills are only just being built, both of them in northern Sweden. SSAB and Stegra are aiming to fire up their respective facilities before the end of the decade, despite significant challenges with project funding and delays.

Globally, the limited supply of green hydrogen and sky-high cost of producing it have stalled progress on green steel — problems exacerbated in the United States by politics. Over the last year and a half, the Trump administration has weakened or paralyzed federal funding for new clean hydrogen projects. Gov. Landry has done little to advance the low-carbon hydrogen efforts started by his predecessor, and the state has barely installed any renewable energy to date.

So it’s perhaps unsurprising, if not deeply disappointing for advocates like Bradford Rosenberg, that Hyundai said it will use natural gas when it fires up its steel mill in 2029.

“The production of green hydrogen has not yet reached the scale, nor cost, necessary for feasible implementation to replace natural gas,” Hyundai said in its December air-pollution permit application to the Louisiana Department of Environmental Quality. 

In its filing, the company said it would use green hydrogen when there’s enough supply to meet its demand. But it hasn’t disclosed a timeline for when it plans to shift away from gas. ​“As hydrogen becomes more viable, we have also considered a phased transition to blue and green hydrogen,” Hyundai-Posco Louisiana Steel said by email.

Experts question whether the company will want to make such carbon-cutting investments after its gas-fueled plant is already up and running.

“Hyundai has the ambition, and we really want to see it put into practice,” Cooper Phillips said. 

As Hyundai sorts out what will happen inside its steel mill, the world outside is preparing for the plant’s arrival.

Earlier this year, the River Parishes Community College broke ground in Donaldsonville on the Hyundai Training Center, which will offer a two-year program to prepare people for jobs in the steel industry. Landry and Bo-ryong Lee, Hyundai Steel’s president and CEO, were among those tossing shovels of dirt at the February ceremony. Korean investors have purchased hotels and apartments in downtown Donaldsonville to house future steelworkers, and the first Korean barbecue joints are opening up.

About a dozen miles down the river, in St. James Parish, the industrial gas supplier Air Liquide is building a second air-separation unit to serve Hyundai’s steel mill.

During my visit to the area, I stopped by to see its existing facility, which sucks outside air through an enormous filter and distills the molecules into high-purity oxygen, nitrogen, and argon. The Paris-based company is about to start construction on a $350 million additional unit and infrastructure that will mainly supply oxygen by pipeline to Hyundai’s new electric arc furnaces. Injecting oxygen makes chemical reactions more efficient, reducing the amount of electricity needed and lowering emissions.

“Hyundai wants to put the steel plant in badly, so we’re working at a fast pace. We’re going to support their needs,” Nick Frasier, the plant manager, told me as we toured the plant by car, rolling past towering columns and snaking pipes. He said the new unit is expected to come online in 2028.

Air Liquide is also one of the world’s largest producers of hydrogen. The company today primarily makes conventional hydrogen from natural gas, though it is building several large-scale green hydrogen plants at sites in Canada, Europe, and Asia. 

Matthieu Giard, a group vice president for Air Liquide, said the company ​“would be more than happy” to partner with Hyundai if the steelmaker decides to use hydrogen in its Louisiana steel mill. ​“That could be another project for us tomorrow,” he said by phone from his office in Houston.

But Louisiana will need to first see a massive buildout of renewable energy if Hyundai is going to make that switch.

Producing enough green hydrogen to supply the steel mill could require at least 3 gigawatts of renewable generation capacity electricity to run electrolyzers, the Clean Air Task Force estimated. That’s more than all of the solar power installed in Louisiana, which makes up most of the state’s clean energy capacity. Natural gas power plants provide the majority of the state’s total electricity generation, along with a smaller share from nuclear facilities.

Entergy Louisiana, the state’s largest utility and Hyundai’s electricity provider, is planning to add up to 3 GW of solar power to its portfolio in the coming years. And developers are advancing plans to build the state’s first three onshore wind farms. However, earlier efforts to install gigawatts’ worth of turbines in the Gulf of Mexico have screeched to a halt amid the Trump administration’s attacks on offshore wind development.

Clean energy advocates in the state say they’re trying to position Louisiana’s industrial growth as a key reason for policymakers to support more wind and solar development — particularly given that renewables are now cheaper and faster to build than gas and nuclear plants. Hyundai itself spoke out about its coming clean-energy needs during an off-the-record panel in April at the Powering Louisiana Forum.

If built as promised, Hyundai’s green steel mill could be the start of that broader transformation for both the state and U.S. steelmaking.

When I sat down with Bradford Rosenberg, Wells, and Dickerson in Baton Rouge, the three of them wavered between excitement about what the project could deliver and skepticism about whether Louisiana was being sold yet another dream too good to be true. As they see it, the work of their grassroots coalition is to not only pressure Hyundai but also counter the growing disillusionment in surrounding communities and even within themselves, and to hold on firmly to a vision of what could be.

“The Hyundai plant is huge for the United States and for us,” Bradford Rosenberg said. ​“We want to make sure we get it right.”