The Korea Herald is publishing a series of articles on the quest of South Korea’s government and businesses to switch to renewable energy. -- Ed.

South Korea’s largest automaker Hyundai Motor should speed up its efforts in changing its business portfolio toward carbon-neutral in order to avert a major blow in the global market within a year or two, according to Greenpeace deputy director Jude Lee.

Globally, countries are setting stricter climate targets in response to growing environmental concerns. The European Union, which aims to be climate neutral by 2050, is slated to toughen its regulations on carbon dioxide emissions from 2020. By 2021, carmakers must cut their average car emissions to less than 95 grams of CO2 per kilometer. Otherwise, they face a 95 euro fine for every gram of CO2 by which they exceed that limit, multiplied by the number of new cars they sell.

In China, automakers that produce more than 30,000 vehicles in the country will have to produce a certain proportion of them new energy vehicles, with the proportion increasing in 2020. Similar regulations are implemented in 11 states in the US, including California. 

“Hyundai Motor seems too slow in following this fast-changing environmental trend. If it does not significantly change its business portfolios within one or two years, it will suffer major setbacks (in the global market),” Jude Lee, a deputy program director at Greenpeace based in Seoul, in an interview with The Korea Herald.

Amsterdam-based Greenpeace is a non-governmental environmental organization with offices in over 39 countries.

In the EU market only, Hyundai may face around 300 million euro ($3.3 million) in penalties from 2021 if current business portfolio remain unchanged, according to London-based research firm JATO.

Hyundai’s eco-friendly cars, including hybrid, electric and hydrogen, account for around 4 to 5 percent of its total car production. Excluding hybrid cars, which are not deemed eco-friendly in Europe, the portion is around 2 percent.

Hyundai plans to increase its number of eco-friendly car models, including hybrid, electric and hydrogen vehicles, to 44, with the goal of annual sales of 1.6 million units by 2025, compared to last year’s sales figure of around 100,000 units.

This year, Greenpeace will focus its efforts on curbing global automakers’ activities that fuel climate change.

“Last year and this year, we pressured Volkswagen to pledge to go carbon neutral by 2050 in terms of car production. We will continue to push other automakers to follow suit. Hyundai will surely be included,” she said.

Last month, the world’s largest automaker, Volkswagen, vowed to become entirely carbon neutral, including in production. BMW and General Motors already committed in 2015 and 2016 respectively to procure 100 percent of the electricity they use from renewable sources for its operations.

Hyundai also announced last year that it would install 27 megawatts’ worth of solar panels by 2020, together with state-run Korea Hydro & Nuclear Power -- but those panels cannot cover all Hyundai’s domestic energy needs.

Greenpeace has a history of eliciting big Korean firms to go renewable.

Citing Samsung as an example in another industry to have made renewable energy commitment, Lee said Samsung appears to have “willingness to change” because it continues to update its renewable energy efforts on its website so that anyone can see them. 

But Lee said the tech firm should be more responsible for its devices that are wasted through “planned obsolescence,” which refers planning a product to last a limited time in order to generate purchase cycle.

“So many resources, such as rare earth metals, copper, nickel and gold, are used to make digital devices. Making them obsolescent in three to four years wastes too many resources and inconveniences consumers,” the director said.

Last year alone, global e-waste stood at around 50 million metric tons. More than half of that was made up of digital devices, such as smartphones and computers.

In 2017, when Samsung’s smartphone Note 7 exploded, the firm initially said it would discard all of them. But, it later changed its decision and launched refurbished phones under strong pressure from Greenpeace.

For the nation’s largest search giant Naver, Greenpeace gave a grade A in its renewable energy report in 2015 when the firm committed to using 100 percent renewable energy for its data centers, while giving a grade F to its rivals, Kakao, Samsung SDS and LG Uplus. 

“We gave Naver with the highest grade because we believe the promise itself will send a strong signal to the market. Four years on, we doubt whether Naver is following its promise,” she said.

“In 2017, we found out Naver’s use of renewable energy for its data center was around 2 percent -- way lower than the promise of 100 percent -- and we haven’t heard any more progress from the firm since.”

True, for automobiles, devices or data centers, it is not easy for Korean firms to use renewable energy here because it is impossible to purchase renewable power from private firms in Korea. The state-run Korea Electric Power Corporation is the nation’s only energy provider.

“Still, this cannot be an excuse. Look at US firms. They collectively raise their voice to the government when it is an issue related to going carbon-neutral. We can’t find any such company here,” the senior campaigner said.

In 2015, Google, Apple and Facebook sent a letter to North Carolina legislators urging them not to change the state’s renewable energy laws. In 2017, 25 companies, including Google, Apple, Intel and Morgan Stanley, sent a letter to Trump administration to strongly urge him to keep the US in the Paris Agreement.

Going renewable is no longer an environmental thing for companies but an economic thing, she said.

So far, companies have been running their business in the way of aggravating climate change and exploiting resources. However, such business models “will no longer make profits” as more companies have to pay carbon tax, credit rating agencies lower credit ratings for environmentally unconscious firms and many global clients began to urge their suppliers to go carbon neutral, according to Lee.

A carbon tax is applied in several European countries, such as Sweden, the Netherlands and Norway, as well as several states in the US. Korea also adopted an emissions trading scheme -- a form of carbon tax -- in 2015. Around 600 companies emitting more than 125,000 metric tons of CO2 equivalent per year are obliged to join the scheme.

New York-based S&P Global Ratings said this month it would evaluate a company’s environmental, social and governance factors when assessing a company’s credit ratings to meet increasing investor demand for sustainable-investment.

The 173 multinational companies that make the commitment to go 100 percent renewable, including Apple and Google, are pushing their suppliers to follow suit. Apple, BMW and Volkswagen have all begun to pressure their Korean suppliers -- including SK hynix, LG Chem and Samsung SDI -- to expand their use of renewable energy.

By Shin Ji-hye (shinjh@heraldcorp.com)