<Anchor> This is a
friendly economic time. As always, I will be with reporter Kim Hye-min. Reporter Kim, we must reduce carbon in order to prevent global warming. This talk is now almost at the level of common sense. In this process, there are a lot of stories about carbon neutrality, carbon credits, and a little bit difficult.
<Reporter> Because of
carbon neutrality, we often hear things like 'the price of electricity can go up' or 'inflation is going up' these days.
We charge carbon to reduce carbon. In addition, the use of renewable energy instead of fossil fuels causes the cost of carbon to permeate the cost of living.
There are times when you think that climate change is serious and it is a cost you have to pay to deal with it, but you wonder how it is being used. Simply put, these days, carbon is money, i.e. cost.
It started with the 'carbon credit' trade, and in 1994, the international community announced the UN Convention on Climate Change to curb the emission of greenhouse gases that cause global warming.
And three years later, the 'Kyoto Protocol' was adopted as a concrete implementation plan for this convention. At this time, the carbon emission trading system was born, and this system has been continuously developed to this day.
<Anchor>
So, carbon credit is the right to emit carbon. Yes? The price has gone up a lot lately.
<Reporter> The
carbon emission trading system is generally operated based on the 'cap and trade' principle.
When the government sets a 'cap', that is, the total amount of emissions allowed, companies have 'emissions' that can only emit greenhouse gases within a certain range.
These credits can be traded, or traded, between companies. Until recently, Tesla, famous for producing electric vehicles, made huge profits with carbon credits.
Some states in the United States give carbon credits to manufacturers according to the production of eco-friendly vehicles. But as you know, Tesla only produces electric vehicles, so it does not emit any carbon at all.
They sold it to other companies and made $1.58 billion in revenue last year alone. That's over 1.7 trillion won.
On the other hand, companies that emit a lot of carbon need carbon credits, and as countries competitively raise their greenhouse gas reduction targets, the price of credits continues to rise.
If we take the price of carbon credits in Europe as an example, it has already doubled since this year.
<Anchor> If
you look at the industrial structure of Korea, it is a manufacturing center that has no choice but to emit a lot of carbon. If that happens, it will cost Korean companies a lot to produce.
<Reporter> For
companies that emit a lot of carbon, this is directly related to cost. steel or oil,This also includes companies with internal combustion engines.
In terms of domestic sales, the top 30 companies spent 430 billion won on purchasing carbon credits last year, a 77% increase from the previous year. Hyundai Steel, a steel company, is said to have spent 150 billion won just to buy emission permits.
There was also an announcement by the Korea Institute for Industrial Economics and Trade, and there was also an announcement that the carbon-neutral cost would be at least 400 trillion won by 2050 in just three industries: steel, cement, and petrochemicals.
As mentioned earlier, these costs are eventually returned to consumers in the form of electricity rates or price increases.
<Anchor>
By the way, Korea recently expanded and announced the carbon-neutral policy aimed at reducing carbon. From the company's point of view, as you explained earlier, there are voices who are concerned about the side effects because the cost will inevitably be higher?
<Reporter>
Yes. First, let's talk about carbon neutrality, which is zero net carbon emissions.
It began in earnest through the Paris Climate Agreement adopted in 2015, at which time each country agreed to achieve carbon neutrality by 2050.
Korea has decided to reduce it to 26.3% by 2030 compared to 2018 and achieve net zero in 2050. This was the president's announcement.
However, in this case, the annual reduction rate is higher than that of the United States and the United Kingdom.
In addition, the period of reaching carbon neutrality is 60 years for the European Union and 42 years for the United States, whereas we have 32 years, which is a very rapid process.
The issue of carbon neutrality is also escalating into friction, so there is no disagreement between the public and private sectors that this should be accomplished, but it is a situation that needs to be addressed because it requires huge costs in our industry, which is centered on manufacturing.