Hyundai breaks ground Friday on a nearly $6 billion steel mill in Ascension Parish, Louisiana, that could rank as the lowest-car-intensity facility of its kind in the United States when it opens in 2029. The plant, built by Hyundai-Posco Louisiana Steel — the U.S.-based subsidiary of Hyundai Steel — on a cleared former sugarcane plantation site, will initially run on natural gas.

That configuration still puts it well below the emissions profile of the aging coal-fueled mills that supply most American automotive steel. The company says its products will carry a carbon footprint 70% lower than conventionally produced steel.

The process route is direct reduced iron fed by a gas-burning shaft furnace, with the DRI then melted in an electric arc furnace. Most of the facility's emissions will come from the gas-fired reduction step.

Permit fight still pending

The groundbreaking proceeds before the Louisiana Department of Environmental Quality has issued a final air permit. Kimberly Terrell, a research scientist with the Environmental Integrity Project's Center for Applied Environmental Science, told reporters the draft permit downplays the mill's potential air quality impacts.

"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," Terrell said. The pollutant list includes nitrogen oxide, particulate matter and sulfur dioxide — each tied to respiratory and other health effects.

The project is one of several large industrial developments in Ascension Parish, where rural communities along the Mississippi River face mounting industrial encirclement. "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 the site.

Hyundai-Posco Louisiana Steel said it 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 the Ascension Business Report. Hyundai did not respond to Canary Media's request for comment.

Hydrogen pledge, no deadline

When Hyundai unveiled the project in early 2025, it indicated the plant would use green hydrogen and serve as a "catalyst for the hydrogen ecosystem" in Louisiana. The company has since offered little specificity on the fuel switch in its state permit applications, and the green hydrogen market continues to face cost and logistical hurdles.

The facility will deploy hydrogen-ready furnace technology and electrify certain steelmaking steps — design choices that analysts at RMI say can avoid locking operators into gas for decades. Nick Yavorsky, a senior associate on RMI's iron and steel team, recommends reserving land for electrolyzers and engaging utilities early to secure renewable supply.

"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," Yavorsky said. "We're still not at the point where hydrogen-based steelmaking is cost-competitive with incumbent fossil methods."

"Planning for flexibility [around hydrogen] will ultimately have the potential to position the U.S. as a real leader in this space," said Kaitlyn Ramirez, who leads the RMI team.

Gas-DRI becomes the U.S. default

Hyundai's route is becoming the industry template. U.S. Steel plans nearly $2 billion for a direct-reduced-iron plant at its Big River Steel site in Arkansas, where four electric arc furnaces already melt scrap. Mesabi Metallics is considering a DRI furnace at its Iron Range operation in Minnesota. Tariffs and rising demand are driving the buildout.

Hydrogen-first projects have meanwhile stalled. Cleveland-Cliffs, which received a $500 million Biden-era grant for hydrogen-ready technology, now says it will use the funding to upgrade a coal-fueled blast furnace in southern Ohio.

The near-term milestone to watch is LDEQ's final air permit decision for the Ascension Parish mill — the regulatory step that will determine the emissions envelope for a facility designed to run decades on natural gas, with hydrogen conversion left undated.