New CO2 target may hurt competitiveness

By 2020 Korea plans to voluntarily reduce greenhouse gas emissions by 4 percent from 2005 levels.

The carbon cut plan, finalized by the Lee Myung-bak administration on Tuesday, is likely to pressure the country`s heavy industries such as power generation, steel, petrochemical and automobiles, industry officials said yesterday.

Most of those high energy-consuming manufacturers have already expressed their concern about losing market ground to China, the world`s second-largest carbon-emitter. But with the Korean government pushing ahead with the 4-percent carbon cut plan, the nation`s conglomerates - surely not in a welcoming mood - say they will work to meet the aim, but need to wait until the government comes up with detailed plans.

The government plans to launch a special task force to work out details of the plans to achieve the goal.

"A detailed plan on a carbon cut hasn`t come yet, which means we don`t even know how much the government will try to cut greenhouse gas from the industrial sector and how much from the domestic sector. So there is no specific plan for the company yet," an official of SK Energy, said.



LG Chem, Korea`s largest chemicals maker, said the industry needs to communicate with the government, adding it was hard for the company to consider another carbon cut.

"We have been putting efforts to increase energy efficiency not only to cut carbon emission but also to reduce costs. An additional carbon cut would be difficult for us in future," an LG Chem official told The Korea Herald.

Businesses said in statements that they would follow the plan but also called for the government`s greater support and its careful consideration of conditions of individual industries.

POSCO, the nation`s top steelmaker, stressed yesterday that the government had to have a carbon cut goal that fits the conditions at each industry.

"We will try to reduce carbon emissions through saving energy, increasing energy efficiency and developing technological innovation. But (the government needs to have) carbon cut goals and following plans that satisfy the conditions of each industry," the company said in a statement.

Builders and logistics companies are on alert because the government said it would focus on reducing carbon emissions in the construction and transportation sectors, noting that they have much room for reduction.

About 98.2 million metric tons of greenhouse gas, 20 percent of the total, comes from the country`s logistics sector.

Air carriers are to replace old, inefficient jets with new planes that emit less CO2 per passenger.

Korean Air, the nation`s largest air carrier, plans to buy 10 A380 jumbo jets from Airbus and 10 B787s from Boeing, which both emit 30 percent less CO2 than conventional flights in 2010 and 2011.

Hanjin Shipping has been installing energy efficient engines and replacing diesel-driven cranes at ports by ones operated by electricity.

Experts say the government will start with forcing state-run companies like the Korea Electricity Power Corp. or quasi-public firms like POSCO to reduce carbon emissions because it will be harder to get private companies to reduce emissions.

KEPCO and its subsidiaries plan to spend 3.3 trillion won by 2020 on the development of smart grid technology, infrastructure for plug-in cars, energy efficient homes and other related eco-friendly power generation technologies.

(christory@heraldm.com)



By Cho Chung-un