Carbon Neutrality at a Standstill: The Lost Promise of South Korean Petrochemical Companies
About
Solutions for Our Climate looks at the current state of Korean oil refining and petrochemical industries facing decarbonization pressure. In the first part of the report, we examine the amount of greenhouse gas emissions (GHGs) and the major processes that contribute to the emissions across the oil refining and petrochemical sector. Next, we analyze GHG emissions of major Korean oil refining and petrochemical companies, as well as their strategies and activities to reduce GHG emissions. Lastly, we compare companies’ GHG reduction strategies, identify key limitations in these strategies/initiatives, and provide necessary recommendations to the industry and the Korean government.
Download report
Executive summary
To drive actionable decarbonization measures, Korean petrochemical and oil refining industries must establish specific targets and actionable plans, considering the following:
1. Emission reductions and plans consistent with the 1.5℃ Global Warming Targets (and not just merely setting climate targets aligned with Nationally Determined Contributions as a formality)
2. Expansion of Research and Development (R&D) projects on pilot projects
3. Development of Scope 3 emission inventories across supply chains’ entire life cycles
In addition, to actively drive decarbonization in the oil refining and petrochemical industries, the following policies and systems must be revised:
1. Setting NDC reduction targets that accurately reflect the current situations of the oil refining and petrochemical industries
2. Strengthening carbon emissions management disclosures in accordance with Global Standards
3. Requiring tighter emission allowances by expanding the number of auctioned credits in the Korean Emissions Trading Scheme (K-ETS)
Key findings
Currently, the greenhouse gas reduction strategies for the five major petrochemical and oil refining companies in Korea are centered on 1. Energy reduction, 2. Introduction of eco-friendly raw materials, 3. Securement of carbon credits, 4. Life-cycle assessment (LCA). However, these strategies presented by the major Korean industries face inherent limitations to reduce greenhouse gas emissions and address climate change issues/risks.
The inherent limitations of companies’ GHG reduction and climate change risk strategies could be attributed to:
- Lack of detailed action plans
- Lack of significant investments
- Lack of medium-term plans, such as annual or phased targets
- High reliance on indirect GHG emission reductions and carbon offsets
- Lack of willingness to improve and/or innovate on core processes.
