POSCO Chemical [003670:KS], the chemical and battery material unit of South Korean steelmaker POSCO Group [005490:KS], will issue green bonds worth KRW300bn (USD244.4m), as reported by the Korea Economic Daily on April 8. The bond will encompass five-year bonds worth KRW100bn (USD81m) and three-year bonds worth KRW200bn (USD162m). This was the first time that POSCO Chemical issues an environmental, social, and governance (ESG)-type bond. The company will use the proceeds to boost the production capacity of two joint ventures (JVs) which manufacture cathodes and precursors for electric vehicle (EV) batteries in China’s Zhejiang Province. With the investment, POSCO Chemical will raise each JV’s annual production capacity from 5,000 tons to 35,000 tons. 

POSCO Chemical’s green bonds could facilitate POSCO Group’s transition from a conventional steelmaker to a battery material supplier of electric vehicles (EVs). The company aims for a 20% share in the global EV battery material market by 2030 when it plans to manufacture 400,000 tons of anodes and 260,000 tons of cathodes a year. Last August, POSCO Group also raised USD1.3bn through convertible green bonds and committed to using the funds for expanding its rechargeable battery materials and hydrogen businesses. By switching to low-carbon fuel and raw materials, providing energy-efficient materials for EVs, and adopting carbon capture, utilization, and storage (CCUS) technologies, POSCO aims to cut 20% of its carbon dioxide emission by 2030, 50% by 2040, before the group reaches carbon neutrality by 2050.

Sources:

https://www.kedglobal.com/esg-bonds/newsView/ked202204080023

https://www.kedglobal.com/corporate-bonds/newsView/ked202108150003

https://www.kedglobal.com/battery-materials/newsView/ked202012030011

http://www.businesskorea.co.kr/news/articleView.html?idxno=81390

https://newsroom.posco.com/en/posco-pledges-to-achieve-carbon-neutrality-by-2050-and-lead-low-carbon-society/