SeAH News 2022-11-29

SeAH Besteel Holdings and EQUIS Signed an MOU for Sale of REC

To expand the scope of ESG management and accelerate the Group’s transition to renewable energy with the signing of the MOU for sale of REC from PV power generation plants. To step up the Group’s efforts on reducing carbon emission by securing renewable energy equivalent to 21MW over 20 years (26,828MWh in annual average)

SeAH Besteel Holdings Corporation(“SeAH Besteel Holdings”) signed an MOU for long-term sale of renewable energy certificate(“REC”)1 with EQUIS Energy Korea(“EQUIS”) on November 30.

By signing the MOU with EQUIS, SeAH Besteel Holdings has secured a beachhead by which SeAH Besteel can stably procure an annual average of approximately 26,828MWh of electricity generated by the 21MW PV power generation plant in Jeollanam-do for 20 years. The above amount is equivalent to 2 to 3% of the entire annual electricity consumption by SeAH Besteel.

After the signing of this MOU, the two companies are to sign an agreement in the first half of 2023. SeAH Besteel Holdings plans to use the electricity generated by the PV power plant to power the operations of its subsidiaries, such as SeAH Besteel and SeAH CSS, which are carrying out the activities expected to reduce carbon emission by approximately 12,325 tons per year, which is equivalent to planting approximately 1.87 million pine trees per year in terms of the carbon neutrality effect.

Because the electric furnaces of SeAH Besteel and SeAH CSS process iron scrap, the Scope 1 emission (the direct carbon emission) from the electric blast furnaces of SeAH Besteel and SeAH CSS is 2 to 3 times smaller than those that process iron ore. SeAH Besteel Holdings plans to reduce its carbon emission to a degree that will satisfy Scope 2 by producing all its products using the electricity with a significantly small carbon footprint and the electricity generated by new and renewable energy.

EQUIS Energy Korea is a global investor with rich experiences in developing renewable energy businesses in Asia Pacific. Since the opening of its branch office in Korea in 2018, EQUIS has been investing in and developing businesses in the areas of PV and offshore wind power generation, waste treatment, and resource recovery, building a solid infrastructure investment portfolio in Korea. As EQUIS chose SeAH Besteel Holdings as the first long-term buyer of the REC from Shinan PV Power Plant, it plans to strengthen the partnership with SeAH Besteel Holdings to accelerate the transition to renewable energy, the experts are expecting that EQUIS’ choice will become an excellent reference to its efforts to help the Korean companies reduce their carbon emission and achieve RE100 goals.

Mr. Youngju Yang, the CEO of SeAH Besteel Holdings commented that “we will step up our efforts to practically reduce carbon emission, to achieve the goals of SeAH Besteel Holdings, such as expansion of the ESG management and achievement of carbon emission reduction, and our efforts will expand to acquiring the green steel certificates in other countries, securing additional sources of renewable energy, and so on.”

1. Renewable Energy Certificate(“REC”): A certificate issued as a result of generating electricity using new and renewable energy, such as sunlight. More companies are seeking to purchase the RECs because they can be recognized as having used the eco-friendly electricity and reduced the greenhouse gas emission.

2. The carbon emission by the companies are classified into Scopes 1, 2, and 3 according to the nature and the scope of measurement thereof. Scope 1, 2, and 3 respectively mean: the direct emission from the production process; the indirect emission from the process of generating the electricity and energy used by the places of business; and the external emission generated from the processes other than the direct production process, including the emissions generated by the vendors and during logistics process, consumption and disposal.