South Korea’s pledge to go carbon-neutral by 2050 is feared to upend the country’s mainstay sector of steel and petrochemicals and burden companies with over 400 trillion won ($362.3 billion) costs to meet the government target.

President Moon Jae-in said the government was launching a presidential body 2050 Carbon Neutrality Committee to become the seventh in the world to legally mandate roadmap to achieve net zero carbon emission by 2050.

Others working towards the goal are Sweden, United Kingdom, France, Denmark, New Zealand, and Hungary.

But the industry cannot understand why another presidential committee and legalization of carbon balance is necessary

The government already has been addressing carbon issues through the National Council on Climate Change and Air Quality and a five-year energy outline.

On top with the regulatory pressure, the financial cost poses as a huge burden.

Joo Han-gyu, professor at Seoul National University, said that in order to promote net-zero policy focusing on renewable energy, there should be a consideration given to the gap in production cost and cost to set up energy storage system. Mandating the policy without such consideration would lead to a scenario where the country’s state-run utility company Korea Electric Power Corp. bears all of the costs, which in return will raise energy prices.

The far-fetched outline also could stake the international credibility in the country’s greenhouse gas commitments, said Lee Deok-hwan, honorary professor at Sogang University. Achieving post-carbon economy while phasing out of nuclear fuel would be impossible, he added.

Korean Inc. and industry also could lose competitiveness.

Jung Eun-mi, an official from Korea Institute for Industrial Economies and Trade, said that three industries – steel, petrochemical, and cement – would have to bear minimum 400 trillion won cost to convert their systems and facilities to meet the aggressive targets. The cost would go up if facilities are dismantled before their design life.

Steel mills protest that the carbon neutrality is more or less a death notice by 2050.

Companies have all been separately endeavoring to reduce emissions. But a uniform timetable could harden industry, experts advised.

The government plans to coordinate the matter before unveiling the action plan.

By Oh Chan-jong, Song Min-geun, and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]