SK Group, South Korea’s third-biggest conglomerate and one of Asia’s top producers of chemicals and energy products, is recently accused of greenwashing an LNG project in the Barossa-Caldita gas field off the Australian coast, as reported by Financial Times on June 17. While SK claimed the project could achieve near-zero carbon by deploying carbon capture and storage, environmental activists said that the alleged CO2-free LNG project was not only misleading but also technically infeasible.
Last November, SK launched an ESG initiative to transform the company’s portfolio into low-carbon assets and vowed to abandon all new fossil fuel investments. However, the group reached a USD1.4bn deal to develop the Australian LNG project in March 2021. In a letter sent to Chey Tae-won, SK’s chair and biggest shareholder, environmental groups from South Korea, Australia, and other countries pointed out that the LNG deal violated SK’s ESG pledge and undermined the global efforts to mitigate the risks of climate change. SK responded by arguing that the Barossa-Caldita project should not be considered a new investment as the company had already spent USD600m on it since 2012.
This conflict adds to the pressure South Korea is facing in realizing the promise to reduce emissions. President Moon Jae-in pledged last October that the country would achieve carbon neutrality by 2050. However, in 2020, South Korea was the eighth largest carbon emitter globally and the fourth biggest in Asia behind China, India, and Japan. The country remains heavily reliant on coal power, and only 5% of its electricity comes from renewable sources. Although Moon has promised to increase the proportion of renewables domestically, state-backed groups and private companies have been criticized for continued funding and involvement in foreign fossil fuel investments.