As Korean companies chase clean energy abroad, they struggle to go green at home

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As Korean companies chase clean energy abroad, they struggle to go green at home

Published: 30 May. 2025, 10:59

Audio report: written by reporters, read by AI

Thermoelectric powerplants in western Incheon on Jan. 9, 2025 [YONHAP]

Democratic Party presidential candidate Lee Jae-myung’s pledge to expand renewable energy has drawn further attention to the RE100 initiative — a global corporate commitment to using 100 percent renewable electricity — and the slow progress of Korean companies toward that goal.

Among RE100 member companies based in Korea, only one in six has reached or come close to the target. Even those that have made progress did so in overseas operations, not in their domestic businesses.

RE100 is a global initiative promoting a corporate shift to renewable electricity, led by the Climate Group in partnership with CDP. Member companies are encouraged to convert 100 percent of their energy consumption from fossil fuels to renewables such as solar and wind by 2050. The initiative also recognizes the purchase of green instruments such as a renewable energy certificate.

An analysis of a recent report from the Carbon Disclosure Project (CDP) Korea Committee on Friday found that 36 Korean companies registered as global RE100 members — excluding the Korea Water Resources Corporation, or K-water — used 24 percent renewable energy on average last year. This marks a 1.2 percentage point increase from 22.8 percent the previous year.

However, most of this energy transition was taking place at overseas sites, not within Korea.

Last year, only LG Energy Solution and LG Innotek surpassed a 50 percent implementation rate at domestic business sites, with 50 percent and 61 percent, respectively.

A picture of Hanwha Qcells' solar panels in California, installed in May 2024 [HANWHA QCELLS]

In contrast, SK hynix, Samsung Display and SK Specialty reached 100 percent renewable energy use at their overseas sites. Samsung Electronics and Amorepacific each reached 97 percent, while LG Innotek achieved 74 percent overseas. In total, six companies out of 36 either met or nearly met the RE100 target abroad.

Companies cite structural and environmental challenges as obstacles to achieving RE100 within Korea. The renewable energy supply in Korea is nowhere near enough to cover power consumption at business sites, according to insiders.

Last year, total electricity consumption at domestic sites by RE100 member companies was 66,161 gigawatt-hours while domestic renewable energy production totaled only 63,200 gigawatt-hours, falling short of meeting demand.

“In overseas markets, renewable energy is more abundant and cheaper, making the energy transition easier,” said a representative of an RE100 member company. “At domestic sites, reaching RE100 is much more burdensome.”

Even companies not officially part of RE100 are shifting abroad to meet customer expectations.

Hyundai Mobis' solar panels at its factory in Ulsan [HYUNDAI MOBIS]

“We’re not a global RE100 member, but customer requirements made it necessary to increase renewable energy use," said a battery manufacturer partner company official. "Despite the risks, we’re investing in expanding overseas production facilities.”

High generation costs, limited renewable energy infrastructure and underdeveloped transmission networks are also hindering progress.

According to BloombergNEF, the cost of utility-scale solar power in Korea last year was 117.6 won (8.6 cents) per kilowatt-hour — about 9 cents — much higher than China’s 36 won, Japan’s 64.8 won and the United States’ 76.8 won. Utility-scale solar — typically around 20 megawatts — is used to supply electricity directly to the power grid, unlike residential or small-scale systems.

“Other countries have better conditions for renewable energy generation per unit area, and their generation costs are lower than in Korea,” said Kim Seong-su, a professor at the Department of Energy and Electrical Engineering at the Tech University of Korea.

“That’s why Korean companies are investing more overseas to meet RE100.”

Solar panels are installed on a frozen reservoir on Jan. 8, 2025, in Hwaseong, Gyeonggi. [YONHAP]

A recent survey by the Korea Chamber of Commerce and Industry of the top 1,000 domestic carbon emitters showed that 70 percent of 400 respondents believe carbon neutrality will help corporate competitiveness.

However, 85 percent also said the investment risks are too high, suggesting that while companies acknowledge the importance of RE100, their resources toward implementation remain unprepared. In fact, no Korean company newly joined the global RE100 last year.

“If companies pursuing RE100 avoid domestic investment, it could lead to job losses and capital outflows,” said Kwon Chai-won, an invited professor of energy systems at Ajou University. “It’s urgent to create institutional and environmental support so that companies can achieve RE100 at home.”

Professor Kim added, “To expand renewable energy generation, the government and local authorities must take the lead in securing land and building infrastructure like transmission networks.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY NOH YU-RIM [[email protected]]