LG Chem Carbon Emission Cuts Up 34 Percent

An aerial view of “Hwachi,” one of the three facilities at LG Chem’s complex. The complex is the key location for LG Chem’s petrochemical business.

/ Korea Times File

By Kim Yoo-chul
Staff Reporter

YEOSU, South Jeolla Province ― LG Chem is going all-out to reduce greenhouse emissions using advanced technolgy in keeping with the government's policy to combat global warming.

Officials at LG Chem's key petrochemical complex in the port city of Yeosu ― about 455 kilometers south of capital Seoul, say the years-long efforts to cut carbon dioxide during operations there have begun paying off.

"Since 2007, our Yeosu plants has been given 11 carbon credits by the government compared to 21 such credits group-wide," Mo Sung-hun, an assistant manager at the Environment & Safety Department at the complex, told The Korea Times, last week.

From 2007 to the end of 2009, its Yeosu facility has reduced greenhouse emissions by 301,576 tons, Mo said.

"That's a rapid surge. In 2007, the plant only managed a cut of 44,561 tons. But it reduced carbon emissions by 109,916 tons and 147,099 tons in 2008 and 2009," the official said.

C.S. Song, a company spokesman, said LG Chem has so far cut 477,647 tons of carbon emissions, including the numbers in Yeosu.

The complex, which is composed of three separate facilities, is on a tract of 2.7 million square meters.

The number of workers as of the end of last week was 2,072. It made 6.06 trillion won in total sales last year, accounting for near 40 percent of LG Chem's total sales of 16 trillion won, according to the Korea Exchange (KRX).

Such achievements are fueling momentum for LG Chem to pursue sustainable corporate growth by defying the "cap-and-trade" scheme pushed by the government.

The government will soon launch the "greenhouse law" to fight climate change. Korea is the world's ninth-largest emitter of carbon dioxide and other heat-trapping gases, and registered the fastest emissions growth among OECD members from 1990 to 2005.

It plans to introduce the "cap-and-trade" act setting absolute volume limits on emissions as part of its drive for greener policies.

But companies, which worry about the caps hampering growth, called for the tentative bill to water down the intensity when referring to the planned scheme.

Businesses demand greater government support and flexible implementation in consideration of conditions of individual industries.

The new policy is expected to hit the power generation hard. Steel, automobile and other high energy-consuming manufacturers already face stiff competition from China, the world's second-largest carbon emitter.

In mid-November, Seoul said the country would reduce carbon emissions over the next decade through the strictest of three plans under consideration, amounting to a 30 percent cut from the expected 2020 level.

In August, the government committed to setting a reduction target even though South Korea isn't required to do so under the U.N.'s Kyoto Protocol, which expires in 2012.

LG Chem has already secured carbon emissions rights of 200,000 tons of carbon dioxide for 10 years after reporting to the U.N.'s clean development mechanism, or CDM, which was incorporated into the 1997 Kyoto Protocol on climate change.

CDM is a system that calls on governments of developed countries and corporations obliged to cut greenhouse gas emissions to invest money in projects to reduce them in developing countries and get credit for cutbacks.

"An excessive emissions trading system will hurt the competitive edges of relative industries. Cutting the amount of CO2 has become the trend. But it will be welcomed by us to give more credit to our proven track record and steady efforts in lowering emission levels, when the government decides the quotas," Mo said.

Referring to specific related works such as applying energy-intensive technology to its operations and forming separate internal task forces, the official said its Yeosu facility will file more plant design documents (PDD) with the government.

Generating Credit Activity

LG Chem representatives say the company will step up efforts in buying activity in the voluntary carbon market here at the Yeosu facility.

As for a long-term plan, Song of LG Chem has opened the possibility that the Yeosu complex will operate more CDM-related businesses.

The voluntary market, unlike regulated markets, relies on businesses to self-regulate their carbon emissions in the absence of a legally-binding climate pact.

"That's our mid- and long-term plan, though initial talks are under way to apply the business to Yeosu," Song said.

Analysts say fear of Western-imposed carbon tariffs on goods and services from Asia is likely to drive growth in offsetting emissions by large firms in the region.

"CDM business has still been regarded as risky due to the lack of preparations. But we will link the greenhouse emission reduction to future business," the spokesman said.

Separately, LG Chem was given certification from the government for its "greenhouse inventory" strategies and company officials say they plan to implement such systems at its overseas facilities from this year.

South Korea had been reluctant to make any commitment to the reduction of carbon emissions as its economy heavily depends on exports from manufacturers.

"The manufacturing industry must build its future on producing greener products and services," said Noh Hee-jin, a senior research fellow at the Korea Capital Market Institute.

yckim@koreatimes.co.kr