By Jang Daul
There is no magic bullet in curbing carbon emissions from fossil fuels to tackle the global climate emergency. We need to put our priority on increasing energy efficiency and replacing the use of fossil fuels with renewable sources.
According to the International Energy Agency, renewables accounted for almost 90 percent of the increase in global capacity in 2020. Last year the average share of renewables in electricity generation among Organization for Economic Cooperation and Development (OECD) member countries was 32 percent while that of South Korea was the lowest at 7 percent, in stark contrast with Germany's 47 percent, the U.K.'s 45 percent, Japan's 22 percent and the U.S.' 21 percent.
The Korean government has been taking a few initiatives in promoting renewables. But without more active participation of the Korean industry, it would be difficult to speed up the energy transition from fossil fuels to renewables.
More than 290 influential companies around the world have joined the global renewable electricity 100 percent (RE100) initiative, committing to source 100 percent renewable electricity for their operations. According to the RE100's 2020 annual report, 2028 is the average target year for achieving RE100 among its members, while 53 companies have already achieved this.
The main drivers of the RE100 members to increase the use of renewable electricity are, with the order of importance, to manage their greenhouse gas emissions, to meet corporate social responsibility criteria, to respond to customer expectations, to manage long-term risks and to improve air quality.
The industrial sector consumed 289 terawatt-hours (TWh) in 2020, accounting for 56 percent of the total while the share of the residential sector was 14 percent.
With this larger share, the role of corporations in increasing the use of renewable electricity is essential in South Korea. In particular, the responsibilities of the top 10 electricity consuming companies are key for energy transition. In 2019, they consumed 70 TWh, almost equivalent to 73 TWh of the entire residential sector consumption.
Without a substantial reduction among the large industrial electricity consumers, most of the efforts by household consumers would be fruitless. For example, the three largest industrial electricity consumers under Samsung Group are Samsung Electronics, Samsung Display and Samsung SDI.
The power consumption of the three increased by 72 percent from 2010 to 2019 while the total residential electricity consumption increased by 15 percent during the same period. It shows how important the roles and responsibilities of the three Samsung subsidiaries are in decreasing the share of fossil fuels, which was 67 percent in 2019, and increasing the share of renewables, which was 5 percent in 2019 in Korea.
Samsung Electronics announced in June 2018 that it aimed to source 100 percent renewable energy in the U.S., Europe and China by 2020. According to its 2020 Sustainability Report, it achieved 92 percent by 2019. Its home country, however, was not included in the commitment even though Samsung Electronics is the largest electricity consumer in South Korea. The reason was simple. Unlike other countries, there were no renewable electricity procurement policies available, except for self-generation, until the end of 2020.
Yet, the situation has changed. The Korean government has introduced various options for electricity consumers, including companies, to procure renewable electricity. The Green Premium has been available since January and the other options such as purchase of Renewable Energy Certificates (RECs), indirect Power Purchase Agreements (PPAs), equity participation and direct PPAs will be available within 2021.
With the changed policy environment and increased pressure from the global market, several Korean companies began to go ahead. The six subsidiaries under SK Group became the first Korean companies to join RE100 in December 2020 with the goal of transitioning to 100 percent renewable energy by 2050. In 2021, Amorepacific and LG Energy Solution also joined RE100, committing to using 100 percent renewable power by 2030.
In January this year, 92 Japanese major corporations belonging to the Japan Climate Initiative including Sony, Toshiba and Nissan urged the Japanese government to strengthen its current 2030 renewable target twice as ambitious: from 22 to 24 percent to 40 to 50 percent.
The companies emphasized that the key to meeting the national 2050 carbon neutrality goal is "the promotion of a rapid and significant expansion of renewable energy along with improvements in energy efficiency." They also pointed out "an ambitious target will stimulate renewable energy deployment, and Japanese companies will be able to play a greater role in the global business environment, where de-carbonization is accelerating."
Recently, the Federation of Korean Industries, an association for Korea's major conglomerates, claimed that imposition of a carbon tax in South Korea would result in too much burden for the 100 largest emitters and they would have to bear 90 percent of the entire carbon tax.
The claims might be true and that is exactly why the largest emitters need to change the source of their power from fossil fuels to renewables using the available RE100 policy options and be more proactive to support and contribute to enhancing the national renewable electricity targets as their competitors in Japan do.
Jang Daul (daul.jang@greenpeace.org) is a government relations and advocacy specialist at Greenpeace East Asia Seoul Office.
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According to the International Energy Agency, renewables accounted for almost 90 percent of the increase in global capacity in 2020. Last year the average share of renewables in electricity generation among Organization for Economic Cooperation and Development (OECD) member countries was 32 percent while that of South Korea was the lowest at 7 percent, in stark contrast with Germany's 47 percent, the U.K.'s 45 percent, Japan's 22 percent and the U.S.' 21 percent.
The Korean government has been taking a few initiatives in promoting renewables. But without more active participation of the Korean industry, it would be difficult to speed up the energy transition from fossil fuels to renewables.
More than 290 influential companies around the world have joined the global renewable electricity 100 percent (RE100) initiative, committing to source 100 percent renewable electricity for their operations. According to the RE100's 2020 annual report, 2028 is the average target year for achieving RE100 among its members, while 53 companies have already achieved this.
The main drivers of the RE100 members to increase the use of renewable electricity are, with the order of importance, to manage their greenhouse gas emissions, to meet corporate social responsibility criteria, to respond to customer expectations, to manage long-term risks and to improve air quality.
The industrial sector consumed 289 terawatt-hours (TWh) in 2020, accounting for 56 percent of the total while the share of the residential sector was 14 percent.
With this larger share, the role of corporations in increasing the use of renewable electricity is essential in South Korea. In particular, the responsibilities of the top 10 electricity consuming companies are key for energy transition. In 2019, they consumed 70 TWh, almost equivalent to 73 TWh of the entire residential sector consumption.
Without a substantial reduction among the large industrial electricity consumers, most of the efforts by household consumers would be fruitless. For example, the three largest industrial electricity consumers under Samsung Group are Samsung Electronics, Samsung Display and Samsung SDI.
The power consumption of the three increased by 72 percent from 2010 to 2019 while the total residential electricity consumption increased by 15 percent during the same period. It shows how important the roles and responsibilities of the three Samsung subsidiaries are in decreasing the share of fossil fuels, which was 67 percent in 2019, and increasing the share of renewables, which was 5 percent in 2019 in Korea.
Samsung Electronics announced in June 2018 that it aimed to source 100 percent renewable energy in the U.S., Europe and China by 2020. According to its 2020 Sustainability Report, it achieved 92 percent by 2019. Its home country, however, was not included in the commitment even though Samsung Electronics is the largest electricity consumer in South Korea. The reason was simple. Unlike other countries, there were no renewable electricity procurement policies available, except for self-generation, until the end of 2020.
Yet, the situation has changed. The Korean government has introduced various options for electricity consumers, including companies, to procure renewable electricity. The Green Premium has been available since January and the other options such as purchase of Renewable Energy Certificates (RECs), indirect Power Purchase Agreements (PPAs), equity participation and direct PPAs will be available within 2021.
With the changed policy environment and increased pressure from the global market, several Korean companies began to go ahead. The six subsidiaries under SK Group became the first Korean companies to join RE100 in December 2020 with the goal of transitioning to 100 percent renewable energy by 2050. In 2021, Amorepacific and LG Energy Solution also joined RE100, committing to using 100 percent renewable power by 2030.
In January this year, 92 Japanese major corporations belonging to the Japan Climate Initiative including Sony, Toshiba and Nissan urged the Japanese government to strengthen its current 2030 renewable target twice as ambitious: from 22 to 24 percent to 40 to 50 percent.
The companies emphasized that the key to meeting the national 2050 carbon neutrality goal is "the promotion of a rapid and significant expansion of renewable energy along with improvements in energy efficiency." They also pointed out "an ambitious target will stimulate renewable energy deployment, and Japanese companies will be able to play a greater role in the global business environment, where de-carbonization is accelerating."
Recently, the Federation of Korean Industries, an association for Korea's major conglomerates, claimed that imposition of a carbon tax in South Korea would result in too much burden for the 100 largest emitters and they would have to bear 90 percent of the entire carbon tax.
The claims might be true and that is exactly why the largest emitters need to change the source of their power from fossil fuels to renewables using the available RE100 policy options and be more proactive to support and contribute to enhancing the national renewable electricity targets as their competitors in Japan do.
Jang Daul (daul.jang@greenpeace.org) is a government relations and advocacy specialist at Greenpeace East Asia Seoul Office.
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