Korean Companies Need to Address RE100 Issue to Expand Exports

Major global companies such as Apple are increasing pressure on their parts and materials companies to reduce carbon emissions. Concerns that 'carbon neutrality' will become a new trade barrier are increasingly becoming a reality.

Apple disclosed through its newsroom that it requested its major partners late last month to have a comprehensive approach to decarbonization in order to solve a greenhouse gas emission problem. Specifically, it plans to evaluate their decarbonization efforts and track progress annually, including the use of 100 percent renewable energy in their production processes. Its aim is to achieve carbon neutrality in its global supply chain. Apple’s supply chain list includes major Korean electronic and component companies such as Samsung Electronics and SK Hynix, which supply memory semiconductors, Samsung Display and LG Display, which supply OLED panels, and LG Innotek, which supplies camera modules.

In particular, these Korean electronics companies are expanding into new business areas, including automotive electronics, amid sluggish global demand. Yet, the automobile industry is also gradually raising standards for eco-friendliness.

In response, companies are coming up with various eco-friendly policies, including joining the RE100 movement, which requires companies to use electricity generated from renewable energy sources.

Samsung Electronics unveiled its new environmental management strategy in September, announcing that it will achieve carbon neutrality by 2050. However, some analysts say that it will not be easy to achieve short-term goals in domestic production lines due to the nature of the semiconductor industry, which consumes a lot of electricity. According to Samsung Electronics’ Sustainability Report, the company emitted 17.4 million tons of greenhouse gas at home and abroad in 2021, an increase of 17 percent from the previous year.

Most of the Korean companies are at the bottom of the climate crisis response performance evaluation standings, according to a report written by the Greenpeace East Asian branch in cooperation with Stand.earth, an American climate and environmental group. They evaluated global electronics brands’ responses to the climate crisis.

Industry insiders are concerned that even companies that have already announced RE100 plans will find it difficult to satisfy their renewable energy use requirements. Currently, most Korean companies rely on renewable energy supply certificates (RECs), which have relatively small greenhouse gas reduction effects. But poor REC trade makes it difficult for them to buy RECs themselves.