이 기사는 2022년 04월 27일 07:41 thebell 에 표출된 기사입니다.

Samsung Electronics, the crown jewel of South Korea’s top conglomerate Samsung Group, will soon become one of the members of RE100 as it speeds up its shift to clean energy under the country’s new government.

The tech giant recently told the presidential transition committee for President-elect Yoon Suk-yeol that it would join RE100, according to industry sources, with many expecting the company’s official announcement to come at the time of the launch of the new government.

RE100 is a global environmental initiative, led by the Climate Group and CDP, which brings together companies committed to 100% renewable electricity. Its members include over 350 companies around the world.

“We have prepared to join RE100 for a long time, although when to join the initiative has yet to be determined,” an official at Samsung Electronics said.

This marks a turnaround from Samsung’s previous stance of being less active to joining other global companies in reducing greenhouse gas emissions, having repeatedly said the company has nothing to update on its potential participation in RE100.


The biggest reason for Samsung’s passive mode was a potential increase in cost burdens. Samsung manufactures most of its semiconductor products in Korea, and operates manufacturing facilities in Vietnam that produce its smartphones, with Samsung’s shipments accounting for a quarter of the Southeast Asian country’s total exports.

The problem is that in Korea and Vietnam, renewable energy costs are 1.5 to 2 times higher than Europe.

In Korea, the price of renewable electricity is much higher than other energy sources even after taking into account government subsidies. Last year the Korea Electric Power Corp (Kepco) purchased renewable electricity at an average price of 149.9 won ($0.12) per kWh, compared with electricity produced by nuclear (56.69 won), coal (81.62 won) and water (81.73 won) power, according to data compiled by a lawmaker’s office.

Samsung’s situation is also different from some of the other global companies whose main plants are in Europe where renewable energy is widely adopted. In Korea, renewables represent only 8% of the total electricity capacity, much lower than the UK (40.5%) and Germany (39.9%), according to a report released by Kepco Economy Management Research Institute.

Sourcing renewable electricity

Companies are less likely to be able to secure renewable electricity in a stable manner in Korea, which is another factor that made Samsung cautious about joining RE100. They normally buy renewable electricity through a bidding process run by state-owned Kepco, but supply is far behind the demand.

An improvement has been made recently, with Hyundai Elevator signing a power purchase agreement (PPA) earlier this month, representing the first such case in the country. PPAs allow companies to buy renewable electricity directly from power producers, providing more stable and potentially low-cost supplies.

Global institutional investors have also continued to put pressure on companies to become greener. Dutch pension fund APG, one of the world's largest pension investors, sent a letter to 10 large Korean companies, including Samsung, in February to urge them to cut greenhouse gas emissions. The pension fund pointed out that Samsung's ratio of carbon emissions to revenue stood at 8.7%, higher than other global tech giants like Apple (0.3%).

As part of efforts to take stronger climate action, Samsung named Han Wha-jin, an environment expert who previously served for the Lee Myung-bak administration, on its board of directors earlier this year. The company is also leading an effort to set its environmental, social and governance (ESG) road map at the group level. (Reporting by Hyun-ji Sohn)