K-Steel Act

Enactment

The bill (No. 2213904) was proposed on 4 November 2025 at the 429th regular session of the National Assembly by Representative Kim Won-i and 10 others, consolidating and adjusting three earlier bills led by Reps. Eo Gi-gu and Lee Sang-hwi (4 August 2025), Kwon Hyang-yeop (14 August 2025) and Kim Jeong-jae (27 August 2025). It was referred to the Industry, Trade, Energy, SMEs and Startups Committee on 5 November, processed as 대안반영폐기 on 21 November, and carried in the plenary of 27 November 2025 by the same procedure. Promulgated as Law No. 21202 on 16 December 2025 after cabinet approval, it took effect six months later, on 17 June 2026. The government then drafted the enforcement decree, which was passed at a cabinet meeting on 9 June 2026 and took effect together with the law.

Main provisions

Per the bill's summary, the Minister of Industry and Trade establishes a five-year basic plan (Art. 5) and an annual execution plan (Art. 6), while a Special Committee on Steel Industry Competitiveness under the Prime Minister, chaired by the Prime Minister, deliberates and decides major policies and plans (Art. 8). Other provisions cover selection and R&D and commercialisation support for low-carbon steel technology (Arts. 9, 10, 11), low-carbon steel certification (Art. 14), preferential public procurement (Art. 19), designation of low-carbon steel special zones (Arts. 20, 22), designation of specialist recycled-iron resource processing companies (Art. 24), and reflection of national power-grid and hydrogen supply-chain expansion in the electricity supply plan and the hydrogen economy implementation plan (Art. 25).

The enforcement decree provides for the Prime Minister-chaired special committee, with minister-level government members and private members from industry, academia, labour and research, and sets out details of certification, special zones, processing-company designation and the fair-trade exemptions covering joint conduct and information exchange.

Antitrust exemptions

Distinct from ordinary fair-trade rules, Art. 31 requires the Fair Trade Commission to complete review within the restructuring deliberation period where a restructuring applicant files a merger notification with its application, and otherwise within 60 days. Art. 32 exempts a restructuring-approved company's joint conduct with another steel business from the cartel prohibition in Art. 40 of the Monopoly Regulation and Fair Trade Act if the industry minister approves. Reporting at passage described the law as permitting minimum necessary information exchange during restructuring, letting the industry minister approve joint conduct with the Fair Trade Commission's consent, and shortening merger review of restructuring plans from "30+90 days" to "30+60 days."

Background and relations

Passed on 27 November 2025, the law is described as a comprehensive legislative package responding to slowing global demand, rising low-priced steel imports, tariff barriers in the United States and elsewhere, and tightening decarbonisation regulation. External drivers cited include US steel tariffs raised from 25% to 50% in June 2025, the EU Carbon Border Adjustment Mechanism and steel safeguard and TRQ measures, Chinese low-priced steel oversupply, and a domestic construction slump.

The law is tied to the Steel Industry Advancement Plan announced on 4 November 2025 by the Ministry of Industry and Trade with relevant ministries, which calls for pre-emptive capacity adjustment of oversupplied commodity steels, support for high-value special carbon steel (200 billion won), a low-carbon process transition including an 810 billion won Korean hydrogen-reduction steel demonstration project, trade responses, and support for steel-dependent regional economies. POSCO's newsroom said the law is expected to work in tandem with the plan.

Controversy

The law's stated purpose is competitiveness plus carbon-neutral transition, but labour and critical sources frame it as state support for corporate restructuring and capacity reduction. In a 1 June 2026 set of demands to the government, the Korean Metal Workers' Union steel sector committee criticised the exclusion of unions from policy-making and demanded union and regional representation in the five-year basic plan, the annual execution plan and the special committee; binding employment maintenance, total-employment guarantee and no-layoff principles plus a mandatory employment-impact assessment before approval of restructuring, capacity cuts or process conversion; and just-transition provisions. The demands state that regular, subsidiary and in-house subcontract workers lost jobs in restructuring at Hyundai Steel's Pohang and Incheon plants from 2025 into early 2026. The union also demanded transparency and mandatory disclosure of approval criteria, evaluations and implementation results, including employment, safety, prime-subcontractor gaps and regional-economy indicators; prior union consultation and an employment-stability plan for tax and fiscal support; and just-transition policies for the steel cluster regions of Pohang, Gwangyang, Dangjin and Incheon, with power, water and hydrogen infrastructure treated as public plans.

Source wording also differs: union material and POSCO's newsroom described the special committee as under the President, whereas the bill text and enforcement-decree reporting establish it as a committee under the Prime Minister, chaired by the Prime Minister.