Government action needed to help local firms catch up with global transition to clean energy

Carbon neutrality is likely to act as a virtual trade barrier for South Korean companies to approach global markets and the government should act more proactively to help local firms not to fall behind the global trend toward cleaner energy, a POSCO executive said Wednesday.

Speaking at a forum held by the Federation of Korean Industries in Seoul, Kim Hak-dong, the head of POSCO’s steel business unit called for governmental support to help Korean companies to catch up with global competitors.

“Carbon neutrality is becoming a new trade barrier,” he said, before adding, “We need more support that matches that in other rival countries and global companies in fields such as hydrogen reduction steel.”

The European Union has pledged one trillion euros ($1.1 trillion) in funding until 2030 while the United States will spend $2 trillion by 2025, with Japan spending 30 trillion yen ($271 billion), the FKI said.

“Until we reach carbon neutrality, tougher regulations compared to rival countries and companies will not ideal,” Kim said.

POSCO is eyeing to attain net zero emissions by 2050 with plans to reduce CO2 emissions by 20% in the short-term by 2030 and 50% in the mid-term by 2040.

Consisting of three phases, the process will aim to increase energy efficiency and replace the current fuel and raw materials with economical low-carbon ones, as well as maximizing the use of scraps along with applying CCUS technology. In the last phase, it aims to come up with a carbon neutral steelmaking process based on green hydrogen and renewable energy.

Kim Yoon, the chairman of Samyang Holdings and the leader of the K-ESG Alliance, said the forum was “meaningful” in that leaders of different sectors put heads together to discuss the topic of ESG.

“By discussing the challenges that South Korean companies face with the government and the National Assembly, we want to reach the common goal, which is South Korea’s sustainable growth,” Kim said.

Some of the policy ideas suggested the FKI to encourage ESG values include providing tax credits for carbon reduction technology and support for environmental friendly technologies in the fields of biodiversity and circular economy and approval more environmental friendly plastics including biodegradable plastics

Wednesday’s event on ESG was attended by some 60 guests including lawmakers Lee Won-wook and Kim Hoi-jae as well as Lee Gyung-su, who heads the Science and Technology Innovation Division at the Korean Ministry of Science and ICT.

By Yim Hyun-su (hyunsu@heraldcorp.com)