Korean trading firms enhance green business for survival

[Photo provided by Samsung C&T]

South Korean trading companies are stepping up their green strategies by reducing their reliance on trading and strengthening environmental, social and governance (ESG) practices, including carbon neutrality.

The trading division of Samsung C&T Corp. is at the forefront.

In 2020, Samsung C&T became the first company in the Korean industry to declare itself coal-free. It then gradually withdrew from the coal trading business.

The company instead chose to focus on solar power, hydrogen, and secondary battery material recycling. In September last year, it established Samsung C&T Renewable Energy Australia and started its solar power business in earnest.

POSCO International Corp. also recently merged with POSCO Energy Co. to become a comprehensive eco-friendly business company.

“We are creating a liquefied natural gas (LNG) value chain and operating a wind power business in Korea,” said an official from POSCO International.

The company aims to discover new offshore wind power projects by 2027 and grow its carbon capture and storage (CCS) business in conjunction with gas fields. It also plans to operate the world’s first gigawatt (GW) commercial hydrogen-fired power plant.

LX International Corp., which has been engaged in the coal business, is also turning to eco-friendly projects such as lithium and nickel supply for EV batteries.

Hyundai Corp. also said on Sunday that it started operating Unit 6 of its solar farm in Japan in March. The company entered the Japanese solar market in 2019. It also operates six solar farm units in Korea.

The reason behind the increase in investments in eco-friendly businesses is the limitations of their trading business. Korean companies are also entering the global market directly, which reduces their dependence on general trading partners.