SK, UAE sovereign wealth fund to cooperate on climate change

SK Group Chairman Chey Tae-won, currently also the chairman of the Korea Chamber of Commerce and Industry, and Mubadala CEO Khaldoon Khalifa Al Mubarak signed the MOU. [Photo by Yonhap]

SK Group and Mubadala Investment Co., an Emirati state-owned holding company and investor, have agreed to cooperate on climate change as part of discussions between South Korea and the United Arab Emirates (UAE) on cooperation in energy, infrastructure and other industrial sectors.

SK and the Abu Dhabi-based sovereign wealth fund signed a memorandum of understanding to establish a voluntary carbon market on Sunday at the Qasr Al Watan presidential palace in Abu Dhabi. SK Group Chairman Chey Tae-won, currently also the chairman of the Korea Chamber of Commerce and Industry, and Mubadala CEO Khaldoon Khalifa Al Mubarak signed the MOU.

A voluntary carbon market is where carbon credits that have been certified by private institutions are traded. In a voluntary carbon market, businesses and institutions with no requirements can voluntarily participate in the market alongside businesses that are required to cut their carbon emissions, SK said.

Under the MOU, SK and Mubadala will develop a steering group and a working group to set the details surrounding the bilateral partnership. The two plan to particularly put weight on how to acquire methodological reliability and transparency in certifying carbon emissions.

Shared areas of interest are also part of the discussions to include more Asian participants, both public and private.

In June 2021, SK established a carbon reduction certification center to provide certifications of carbon reduction methodologies and carbon emissions. As the first Asian private business to make such an attempt, SK certified 16 methodologies, including low-power semiconductors, lubricants with higher fuel efficiency, as well as 740,000 tons of carbon emissions through the certification center by October.

Mubadala is UAE’s sovereign wealth fund investor. With about $284 billion (353 trillion won) in assets, the sovereign wealth fund has made investments across global eco-friendly areas. It also holds a stake in AirCarbon Exchange, which was established in 2019.