As global climate change intensifies, the South Korean government continues to deepen its control over greenhouse gas emissions, making low-carbon transition a national strategic priority. As the world’s tenth-largest carbon emitter, South Korea has actively promoted greenhouse gas reduction in recent years, proposing targets to reduce emissions by 40% by 2030 compared to 2018 levels and achieve carbon neutrality by 2050. Based on South Korea’s latest emission reduction policies and industry standards, this article provides an in-depth analysis of the greenhouse gas target management system to guide enterprises in developing scientific emission reduction pathways.

South Korea’s Greenhouse Gas Management Policy System

1.1 Evolution of Management System

South Korea’s greenhouse gas management system has gone through several important stages. In 2010, South Korea enacted the “Framework Act on Low Carbon Green Growth,” marking the beginning of legally regulated greenhouse gas management. In 2012, South Korea officially launched the greenhouse gas target management system, requiring mandatory participation from enterprises or business sites with annual emissions exceeding 125,000 tons. In 2015, South Korea introduced the world’s first national carbon emissions trading system, further improving the market-based emission reduction mechanism.

In 2021, South Korea revised the “Framework Act on Carbon Neutrality and Green Growth for Climate Crisis Response,” legally establishing the 2050 carbon neutrality target. The enactment of this law marked a new phase in South Korea’s greenhouse gas management. The law clearly stipulates reduction targets, sectoral responsibilities, and implementation pathways, laying a solid foundation for future greenhouse gas management work.

1.2 Regulatory Framework and Main Responsibilities

South Korea has established a multi-level greenhouse gas management system. The Ministry of Environment, as the main governing body, is responsible for coordinating national greenhouse gas management work. The Korea Greenhouse Gas Management Center undertakes specific implementation responsibilities, including emission verification, quota allocation, and trading management. Local governments are responsible for supervision and management within their respective regions.

As emission reduction entities, enterprises need to establish greenhouse gas management departments, assign professional staff, and build comprehensive monitoring, reporting, and verification systems as required. Major emitting enterprises must regularly submit emission data and reduction plans to governing authorities. The Korea Greenhouse Gas Management Association provides technical support and personnel training to help enterprises improve their management capabilities.

1.3 Control Requirements for Key Industries

Different industries face differentiated control requirements. The steel industry, as South Korea’s largest greenhouse gas emitter, needs to achieve a 20% reduction from 2018 levels by 2030. Specific measures include promoting hydrogen-based smelting technology, increasing scrap steel utilization, and applying carbon capture technology. The chemical industry focuses on raw material substitution and process optimization, aiming to achieve a 25% reduction from 2018 levels by 2030.

The power generation sector bears the largest reduction task, needing to achieve a 45% reduction from 2018 levels by 2030. This will be achieved mainly through phasing out coal power, developing renewable energy, and promoting hydrogen power generation. The cement industry aims to achieve a 35% reduction from 2018 levels by 2030 through increasing alternative fuel usage and improving production processes.

1.4 Recent Policy Development Analysis

In 2024, South Korea further strengthened its greenhouse gas management requirements. The newly revised management measures expanded the scope of target enterprises to include those with annual emissions exceeding 50,000 tons, expected to add approximately 300 new enterprises under management. Meanwhile, penalties for enterprises failing to meet reduction targets have been increased, with fines up to 5% of annual revenue.

Regarding incentive policies, the South Korean government expanded energy conservation and emission reduction support funding, allocating 500 billion won in special funds for 2024, focusing on supporting enterprises in low-carbon technology transformation. A green loan support program was also launched, providing preferential interest rate financing for enterprises implementing emission reduction projects. For small and medium-sized enterprises, dedicated technical consulting and capacity building programs have been established.

The latest data released by South Korea’s Ministry of Environment shows that by the end of 2023, enterprises under greenhouse gas target management had achieved cumulative emission reductions of 250 million tons, exceeding phased targets. This indicates that South Korea’s greenhouse gas management system is playing an active role in promoting enterprises to accelerate low-carbon transformation. With further enhanced management requirements, greater emission reduction potential is expected to be released.

Various industries have successively released updated emission reduction roadmaps. The semiconductor industry has committed to using 100% renewable energy in production by 2030. The automotive manufacturing industry plans to increase new energy vehicle production to 50% of total output by 2030. The establishment of these targets will further drive coordinated emission reduction across industry supply chains. Meanwhile, the South Korean government is actively advancing research on cross-border carbon pricing mechanisms in preparation for future carbon tariffs.

The continuous improvement of the greenhouse gas management system reflects South Korea’s determination to advance low-carbon transformation. From recent policy trends, management intensity will continue to strengthen, requiring enterprises to plan ahead and establish systematic emission reduction management systems. Particularly against the backdrop of imminent carbon border adjustment mechanisms, improving greenhouse gas management capabilities has become an inevitable requirement for enterprises participating in international competition.

Analysis of South Korea’s greenhouse gas management policy system shows that South Korea has established a relatively complete institutional framework and implementation mechanism. Policy requirements are clear and explicit, and the regulatory system operates effectively, providing good institutional guarantees for enterprises to conduct greenhouse gas management. Meanwhile, differentiated control requirements and supporting policies create conditions for enterprises to carry out emission reduction work according to local conditions.

Enterprise Greenhouse Gas Target Setting Methods

2.1 Target Types and Scope Definition

Enterprise greenhouse gas target setting first requires clarifying target types and management scope. Regarding target types, South Korea’s greenhouse gas target management system divides enterprise reduction targets into absolute reduction targets and intensity reduction targets. Absolute reduction targets refer to reducing total greenhouse gas emissions based on the base year, suitable for enterprises with relatively stable production scales. Intensity reduction targets use emissions per unit of output or per unit of product as assessment indicators, suitable for enterprises in expansion phases.

In terms of scope definition, South Korea adopts the internationally aligned three-scope classification method. Scope 1 includes direct greenhouse gas emissions from enterprises, such as fossil fuel combustion and industrial production process emissions. Scope 2 covers indirect emissions from enterprises’ use of purchased electricity, steam, and other energy. Scope 3 includes other indirect emissions in the enterprise value chain, such as emissions from raw material extraction, product transportation, and waste treatment.

According to the latest regulations from South Korea’s Ministry of Environment, mandatory target management primarily focuses on Scope 1 and Scope 2 emissions. Enterprises with annual emissions exceeding 125,000 tons must set absolute reduction targets, while those with emissions between 50,000 and 125,000 tons can choose between absolute or intensity reduction targets. For Scope 3 emissions, voluntary reporting is currently adopted, but these may gradually be incorporated into mandatory management as requirements increase.

2.2 Base Year Emission Accounting Methods

Scientific and reasonable base year emission accounting is fundamental to target setting. The Korea Greenhouse Gas Management Center has developed detailed accounting guidelines requiring enterprises to use standardized methods for emission calculations. The accounting process needs to consider multiple key elements, including emission source identification, activity level data collection, and emission factor selection.

For emission source identification, enterprises need to comprehensively review emission points in production and operation processes and establish emission source inventories. Activity level data includes fuel consumption, raw material usage, product output, etc., requiring measured data from metering equipment or financial document records. Emission factors should prioritize industry-specific factors published by the government, with government-approved general factors used when specific factors are unavailable.

To ensure data reliability, South Korea has strict requirements for base year emission accounting. Enterprises need to establish comprehensive data quality management systems, including management specifications for data collection, recording, and archiving. Major enterprises must also engage third-party institutions to verify accounting results. The base year is generally selected as the most recent complete year, though historical years may be chosen as the base year in special circumstances with sufficient justification.

2.3 Emission Reduction Potential Assessment System

Emission reduction potential assessment is an important basis for setting reasonable targets. The Korea Greenhouse Gas Management Center recommends enterprises conduct systematic assessments from technical, economic, and management dimensions. Technical potential assessment focuses on improvement space in existing process technologies and possibilities for new technology application. Economic potential assessment needs to calculate cost-effectiveness of different reduction measures, comprehensively considering factors such as investment payback periods and carbon price expectations.

Regarding management potential, enterprises need to assess how organizational structure, personnel capabilities, and institutional processes support the achievement of reduction targets. The Korea Greenhouse Gas Management Center has developed standardized assessment tools to help enterprises quantify the potential of various reduction measures. Assessment results need to undergo expert review to ensure scientific validity and reliability of results.

Specifically, technical potential assessment includes analysis of equipment energy efficiency improvement, process optimization, raw material substitution, and waste energy utilization. Economic potential assessment needs to calculate emission reduction cost curves to identify the most cost-effective reduction solutions. Management potential assessment focuses on improvement space in organizational optimization, process reengineering, and incentive mechanisms. Through multi-dimensional assessment, enterprises can find the most suitable reduction pathways for their characteristics.

2.4 Target Decomposition and Assessment Mechanism

Target decomposition is the process of implementing enterprise-wide reduction targets layer by layer. South Korean enterprises generally adopt a combination of “top-down” and “bottom-up” decomposition methods. First, overall enterprise targets are determined based on national and industry reduction requirements. Then, targets are decomposed to various production units and functional departments, forming a multi-level target system.

Target decomposition needs to consider multiple factors. First is the emission proportion and reduction potential of each unit, with units having greater reduction space taking on more reduction tasks. Second is the technical transformation cycle, requiring reasonable arrangement of implementation schedules for major process improvement projects. Additionally, impacts of uncertainties such as production plan changes and market demand fluctuations need to be considered.

The assessment mechanism is key to ensuring target achievement. South Korean enterprises generally establish multi-level assessment systems with monthly monitoring, quarterly evaluation, and annual assessment. In assessment indicator design, besides the core indicator of emission reduction, process indicators such as energy-saving technical transformation project progress and management system implementation are included. Assessment results are linked to department performance and individual compensation, forming effective incentive and constraint mechanisms.

It’s particularly important to note that target setting is not a one-time task but requires establishing dynamic adjustment mechanisms. Enterprises should regularly evaluate target completion status and optimize and adjust targets according to internal and external environmental changes. The Korea Greenhouse Gas Management Center recommends enterprises conduct comprehensive target evaluations annually, with revisions and improvements made when necessary.

Overall, scientific and reasonable target setting is the primary task of enterprise greenhouse gas management. Enterprises need to set challenging yet feasible reduction targets based on thorough assessment of their own conditions. Meanwhile, sound target decomposition and assessment mechanisms must be established to ensure target implementation. This is not only necessary to meet compliance requirements but also an important measure to enhance enterprise competitiveness.

Target setting also needs to consider synergy with enterprise development strategy. Reduction targets should serve long-term development goals and promote enterprise transition toward low-carbon, efficient, and sustainable directions. This requires enterprises to consider both short-term reduction pressures and long-term development when setting targets, with good strategic planning and pathway design.

South Korea’s practice shows that scientific target setting methods play an important role in promoting enterprise emission reduction. Through clear target orientation, enterprises can better allocate resources, optimize processes, and drive innovation to achieve low-carbon transformation development. As management requirements continue to increase, enterprises need to continuously improve target setting methods and enhance target management capabilities.

Meanwhile, enterprises also need to strengthen communication with stakeholders. During target setting, they should fully consider opinions from employees, customers, investors, and others to enhance target recognition and execution. Externally, they should strengthen cooperation with industry associations, consulting institutions, and technology suppliers to leverage external forces to improve target management capabilities.

It should be emphasized that target setting is only the first step in greenhouse gas management. To achieve set targets, enterprises need to continuously invest in technology innovation, management optimization, and capacity building. This requires enterprises to establish long-term mechanisms, incorporate reduction work into daily operations management, and form systematic and standardized management systems.

Key Technical Measures for Greenhouse Gas Management

3.1 Energy Structure Optimization Pathways

Energy structure optimization is an important pathway for enterprise greenhouse gas emission reduction. South Korean enterprises generally adopt a “clean substitution + efficiency improvement” optimization strategy, promoting low-carbon transformation of energy consumption structure through various technical means. According to statistics from the Korea Energy Management Corporation, energy structure optimization can help enterprises achieve 15-30% of reduction targets.

Clean energy substitution is the primary direction for optimization. Enterprises can reduce fossil energy dependence by increasing renewable energy usage proportion. Specific measures include: building distributed photovoltaic power generation systems, installing solar panels on factory roofs and empty spaces; developing wind energy resources, building wind power facilities in suitable areas; utilizing biomass energy, converting organic waste from production processes into clean energy.

Cascade utilization of energy is an important means to improve energy use efficiency. Enterprises can achieve energy cascade utilization through waste heat recovery and combined heat and power generation. For example, using waste heat from high-temperature processes to supply heat to low-temperature processes, or converting waste heat into electrical energy for reuse. Meanwhile, energy transmission efficiency can be improved by optimizing energy distribution systems and reducing network losses.

Application of energy storage technology can improve renewable energy utilization efficiency. Enterprises can select suitable storage solutions based on their energy use characteristics. Chemical storage is suitable for short-term peak shaving and can smooth out renewable energy fluctuations. Physical storage is suitable for large-scale, long-cycle energy storage. Through reasonable configuration of storage systems, energy supply stability and economy can be improved.

3.2 Process Transformation Solutions

Process transformation is a core means to achieve deep emission reduction. South Korean enterprises have accumulated rich experience in process transformation and formed a systematic transformation method. Development of transformation solutions needs to fully consider factors such as technical feasibility, economic rationality, and implementation difficulty.

Raw material substitution is an important direction for process transformation. Enterprises can reduce carbon emissions from the source by using low-carbon raw materials and renewable raw materials to replace traditional high-carbon raw materials. For example, using industrial slag to replace part of clinker in cement production; using bio-based raw materials to replace fossil raw materials in chemical production; increasing scrap steel usage proportion in steel production.

Process optimization needs to start from a systematic perspective. First is optimizing process parameters through refined control to reduce energy and material consumption. Second is optimizing process routes through process integration and reengineering to reduce intermediate steps. Additionally, attention should be paid to updating process equipment, adopting efficient and energy-saving new equipment.

Carbon capture and utilization technology is an important means to achieve deep emission reduction. Enterprises can select suitable carbon capture technology based on emission characteristics. Chemical absorption can be used for high-concentration CO2 emission sources; membrane separation and other technologies can be considered for low-concentration emission sources. Captured CO2 can be utilized as a resource through chemical utilization, mineralization utilization, and other methods.

3.3 Carbon Asset Management Strategy

Carbon asset management is an essential component of corporate greenhouse gas management. Korean companies generally establish dedicated carbon asset management teams responsible for carbon quota application, trading, and compliance. Through scientific carbon asset management, companies can reduce compliance costs and create additional economic value.

Quota management is the foundation of carbon asset management. Companies need to accurately forecast annual emissions and reasonably apply for quota quantities. Meanwhile, they need to establish quota reserve mechanisms to maintain appropriate quota space for production fluctuations. Regarding quota trading, companies should grasp market conditions, choose suitable trading timing and methods to optimize quota costs.

Emission reduction project development is an important way to create carbon assets. Companies can obtain additional carbon credits through implementing energy-saving and emission reduction projects. Project development must follow relevant methodological requirements to ensure the authenticity and verifiability of emission reductions. Meanwhile, attention should be paid to project economic analysis, balancing investment costs and carbon benefits.

Risk management is a key link in carbon asset management. Companies need to identify and prevent various risks, including price risks, policy risks, and compliance risks. Risk impacts can be reduced through establishing risk warning mechanisms, developing contingency plans, and purchasing carbon financial products. Meanwhile, communication with stakeholders should be strengthened to stay informed of market dynamics and policy changes.

3.4 Digital Management Platform Construction

Digital transformation is an important means to improve greenhouse gas management efficiency. Korean companies generally establish digital management platforms covering the entire process to achieve automated data collection, real-time monitoring, and intelligent analysis. The construction of digital platforms requires overall planning and step-by-step implementation.

The data collection system is the foundation of platform construction. Companies need to install online monitoring equipment at key emission points to achieve automatic collection of energy consumption and material consumption data. For data that cannot be automatically collected, standardized manual collection processes should be established. Meanwhile, data accuracy and timeliness should be ensured by establishing data quality control mechanisms.

Analysis models are the core functions of the platform. Support for management decisions is provided through establishing emission prediction models, emission reduction potential analysis models, and cost-benefit analysis models. Model development should focus on practicality and be continuously optimized based on practical feedback. Meanwhile, data mining and analysis should be strengthened to discover management improvement opportunities.

Intelligent applications are the development direction of the platform. Companies can develop intelligent applications using artificial intelligence, big data, and other technologies. For example, machine learning-based energy consumption anomaly detection, deep learning-based emission reduction path optimization, and blockchain-based carbon asset trading. These applications can improve management efficiency and reduce management costs.

System integration is a key point of platform construction. The greenhouse gas management platform needs to integrate with other corporate information systems, including production management systems, energy management systems, and financial systems. Through system integration, data sharing and business collaboration can be achieved to improve management efficiency. Meanwhile, attention should be paid to network security by establishing comprehensive security protection mechanisms.

Platform operation and maintenance is key to ensuring stable system operation. Companies need to establish professional operation and maintenance teams responsible for system maintenance and upgrades. Meanwhile, user training should be strengthened to improve system usage efficiency. In addition, contingency plans should be developed to ensure timely system recovery in case of failures.

In summary, greenhouse gas management technical measures are a systematic project requiring companies to work from multiple dimensions such as energy optimization, process transformation, carbon asset management, and digital construction. The implementation of these measures requires substantial financial investment and long implementation cycles, and companies need to make long-term plans and resource guarantees. Meanwhile, attention should be paid to the synergistic effects between various measures to form comprehensive solutions.

With technological advancement and improved management requirements, companies also need to continuously monitor the development of new technologies and methods, and timely update and improve management measures. Particularly in digital transformation, companies should grasp technology development trends and actively explore innovative applications. Only by establishing a comprehensive technical measures system can companies achieve greenhouse gas emission reduction targets and promote low-carbon transformation development.

Case Studies of Key Industry Emission Reduction Practices

4.1 Steel Industry Transformation Experience

As the world’s sixth-largest steel producer, South Korea’s steel industry transformation has important demonstrative significance. Korean steel companies represented by POSCO have accumulated rich experience in emission reduction practices.

POSCO has formulated a “2050 Carbon Neutrality Roadmap,” planning to achieve deep emission reductions through multiple stages. The first stage (2021-2030) focuses on developing efficient, low-carbon technologies, including increasing scrap steel utilization, optimizing production processes, and applying intelligent control. The second stage (2031-2040) will introduce breakthrough technologies such as hydrogen-based reduction ironmaking. The third stage (2041-2050) will achieve comprehensive transformation to build a zero-carbon steel production system.

In terms of process technology innovation, Korean steel companies focus on the following measures: optimizing raw material structure, increasing the use of high-quality iron ore and scrap steel; improving blast furnace operation, reducing coke consumption through precise control; developing new energy-saving technologies such as dry coke quenching and blast furnace gas pressure recovery power generation; promoting clean energy applications, gradually increasing the use of hydrogen and biomass energy.

Intelligent manufacturing is an important direction for Korean steel companies’ transformation. Through building smart factories, automated and intelligent control of production processes is achieved, significantly improving energy utilization efficiency. Meanwhile, big data analysis is used to optimize production planning and reduce energy waste. Statistics show that intelligent manufacturing applications can help steel companies achieve 5-10% energy consumption reduction.

4.2 Chemical Industry Energy-Saving Paths

The Korean chemical industry is a traditionally high energy-consuming and high-emission industry, which has achieved significant results in energy conservation and emission reduction in recent years. Companies represented by Lotte Chemical and LG Chemical have explored energy-saving paths suitable for industry characteristics through technological innovation and management optimization.

Raw material structure adjustment is an important means for chemical companies to reduce emissions. Korean chemical companies actively develop bio-based raw materials to reduce dependence on fossil raw materials. Meanwhile, energy consumption in production processes is reduced through measures such as improving raw material purity and optimizing proportions. Some companies have begun using renewable resources to replace petrochemical raw materials to produce green products such as biodegradable plastics.

Process optimization is key to energy conservation and consumption reduction. Korean chemical companies generally adopt the following measures: improving reaction processes, reducing reaction temperature and pressure; optimizing separation processes, reducing distillation energy consumption; strengthening heat recovery, improving energy utilization efficiency; promoting new catalysts, improving reaction selectivity. Through these measures, companies can achieve 10-20% energy consumption reduction.

The promotion of circular economy models also brings significant emission reduction benefits. Korean chemical companies actively build park-level circular economy systems to achieve comprehensive utilization of by-products and cascaded use of energy. Meanwhile, carbon footprint is reduced through product life cycle management. Some companies have established complete material circulation systems to achieve “zero waste” goals.

4.3 Power Industry Clean Development Process

The Korean power industry is a key area for achieving national emission reduction targets. Companies such as Korea Electric Power Corporation (KEPCO) are accelerating industry clean transformation through promoting energy structure adjustment, improving power generation efficiency, and developing new energy technologies.

Renewable energy development is core to the transformation. Korean power companies are vigorously developing clean energy projects such as offshore wind power and solar power generation. As of 2024, renewable energy installed capacity has exceeded 30GW. Meanwhile, they actively develop energy storage technologies to solve technical problems of renewable energy grid connection. Smart grid construction has also made important progress, improving renewable energy consumption capacity.

The upgrade and transformation of traditional thermal power units continues to advance. Through adopting ultra-supercritical power generation technology, advanced desulfurization and denitrification technology, intelligent combustion control systems, etc., unit efficiency is significantly improved and pollutant emissions are reduced. Some units have achieved “near-zero emission” targets. Meanwhile, fuel structure optimization is carried out, increasing the proportion of natural gas power generation and reducing coal power dependence.

Hydrogen power generation is the future development direction. Korean power companies actively layout hydrogen energy industry chains and conduct hydrogen power generation demonstration projects. They plan to build multiple large-scale hydrogen power stations by 2030 to provide new paths for achieving power sector decarbonization. Meanwhile, they explore coordinated development models of hydrogen energy and renewable energy to build comprehensive energy systems.

4.4 Building Industry Low-Carbon Solutions

The low-carbon transformation of South Korea’s building industry mainly revolves around the building lifecycle. Systematic emission reduction measures have been adopted from design and construction to operation and maintenance. Companies represented by Samsung C&T and Hyundai Construction have carried out numerous innovative practices in this area.

The building design phase focuses on energy-saving factors. Energy consumption is reduced through optimizing building orientation, adopting natural lighting and ventilation, and increasing thermal insulation performance. Meanwhile, prefabricated building technology is promoted to reduce on-site construction energy consumption and material waste. Some projects use BIM technology for energy-saving optimization design, achieving significant results.

Low-carbon construction processes are mainly achieved through the following measures: using low-carbon building materials such as low-carbon cement and recycled aggregates; optimizing construction processes to reduce energy consumption; strengthening construction management to avoid material waste; using clean energy equipment to reduce fossil energy use. Some construction sites have achieved “zero-carbon construction.”

Energy conservation and emission reduction effects are most significant during the building operation phase. Korean construction companies generally use intelligent building management systems to achieve fine energy management. Meanwhile, operating energy consumption is continuously reduced through equipment upgrades and renewable energy applications. Some buildings have reached near-zero energy consumption standards.

Energy-saving renovation of existing buildings is currently a key focus. Building energy efficiency levels are improved through measures such as external wall insulation reinforcement, window and door replacement, and equipment system upgrades. Meanwhile, combined with urban renewal, regional energy system optimization is promoted to achieve large-scale energy savings. Statistics show that existing building renovation can achieve 30-50% energy consumption reduction.

The promotion of green building certification systems plays an important role. Korean construction companies actively participate in G-SEED certification, implementing energy conservation and environmental protection requirements throughout the project process. Certification standards are continuously improved, promoting industry technological progress and management innovation. Meanwhile, positive development trends are formed through market mechanism guidance.

Building waste resource utilization is also an important aspect of emission reduction. Korean construction companies have established comprehensive waste management systems to achieve building waste classification, recycling, and reuse. Some companies have developed new technologies for building waste recycling to improve resource utilization rates. This not only reduces carbon emissions but also creates economic benefits.

Overall, key Korean industries have formed distinctive solutions in emission reduction practices. These solutions emphasize both technological innovation and management optimization, with strong practicality and promotional value. Meanwhile, various industries strengthen coordination to form joint emission reduction efforts, promoting the low-carbon transformation of the entire industrial system.

With technological advancement and policy support, these emission reduction practices will continue to deepen and improve. Particularly with the support of digital and intelligent technologies, the implementation effects of emission reduction measures will further improve. These practical experiences have important reference significance for other countries and regions, worthy of in-depth study and promotion.

Companies should persist in innovation-driven development and continuously optimize emission reduction solutions. They should fully utilize new technologies, processes, and models to explore more efficient and economical emission reduction paths. Meanwhile, they should strengthen international cooperation and experience exchange, learn from advanced experiences, and promote overall improvement of industry emission reduction levels.

Compliance Risks and Response Strategies

5.1 Quantitative Target Achievement Challenges

Korean companies face multiple quantitative target achievement challenges in implementing greenhouse gas emission reduction targets. Government-set reduction targets are increasingly strict, and companies need to achieve significant emission reductions in limited time, creating enormous pressure.

Key industry companies generally face problems such as aging infrastructure and varying technical levels. Small and medium-sized enterprises, in particular, are limited by funding and technical capabilities, making it difficult to quickly complete equipment updates and process improvements. Even some companies that have undertaken energy-saving renovations have not achieved expected results.

There are uncertainties in data statistics and accounting. Companies lack unified standards in emission data collection, accounting method selection, and boundary determination. This makes it difficult to accurately quantify emission reduction effects, affecting the accuracy of compliance assessment. Meanwhile, some companies lack professional carbon accounting talent, increasing compliance risks.

External factor impacts cannot be ignored. Economic fluctuations, market demand changes, extreme weather, and other factors can affect company production and operations, thus affecting the achievement of emission reduction targets. Companies need to establish more resilient emission reduction plans to address various uncertainties.

To address these challenges, companies can take the following measures: establish sound carbon asset management systems to improve data quality and accounting accuracy; strengthen technological innovation and management optimization to enhance emission reduction efficiency; conduct emission reduction potential assessments to develop feasible compliance paths; establish contingency plans to enhance risk response capabilities.

5.2 Technology Transformation Investment Pressure

Low-carbon transformation requires substantial funding investment, creating huge financial pressure for Korean companies. Particularly against the background of increasing economic downturn pressure, companies face dual challenges of investment returns and emission reduction requirements.

Technology transformation investments mainly include the following aspects: equipment updates and upgrades, adopting efficient energy-saving equipment; process optimization, introducing clean production technology; energy system transformation, developing renewable energy applications; environmental protection facility construction, strengthening pollutant control; intelligent system construction, improving management levels. These investments often require substantial financial support.

Increasing financing difficulties are a common problem. Traditional financing channels cannot meet company technology transformation needs, while new green financial products are not yet mature. Some companies have difficulty obtaining adequate credit support due to high asset-liability ratios. This severely constrains companies’ technology transformation progress.

Longer investment recovery periods also affect company enthusiasm. The economic benefits of some energy-saving and emission reduction technologies take longer to manifest, while companies often face short-term performance pressure. How to balance long-term investment and short-term returns becomes a decision-making challenge for companies.

To alleviate investment pressure, companies can consider: actively seeking government support policies and subsidy funds; exploring diversified financing channels such as green bonds and carbon funds; adopting new business models like energy management contracting; implementing technology transformation in steps to control investment risks; strengthening project feasibility studies to improve investment benefits.

5.3 Carbon Cost Transmission Mechanism

The transmission of carbon costs through industrial chains is a significant challenge facing Korean companies. As carbon prices rise and emission reduction requirements strengthen, companies need to reasonably share and transfer carbon costs to maintain competitiveness.

Upstream companies face greater cost pressure. Basic industries like raw materials and energy have higher carbon costs, but due to intense market competition, it is difficult to fully pass costs downstream. This results in compressed profit margins for some companies, affecting sustainable development.

Midstream manufacturing companies are caught in the middle. They face upstream price increase pressure on one side and downstream price sensitivity on the other, making carbon cost transmission difficult. Particularly in international market competition, reduced price advantages may lead to market share decline.

End consumer product companies also face challenges. Consumer awareness and acceptance of green low-carbon products still need improvement, and higher prices may affect sales. Companies need to enhance product added value through brand building and market education.

To establish effective cost transmission mechanisms, companies can: strengthen industrial chain coordination to establish cost-sharing mechanisms; improve product differentiation levels to increase pricing power; develop green premium products to cultivate market demand; optimize supply chain management to reduce overall costs; strengthen carbon asset management to create carbon trading benefits.

5.4 Cross-border Trade Impact Analysis

Global carbon pricing mechanisms and border adjustment measures have significant impacts on Korean export-oriented companies. In particular, the implementation of the EU Carbon Border Adjustment Mechanism (CBAM) brings new challenges to export companies.

Increased export costs are a direct impact. Companies need to pay carbon tariffs or purchase carbon allowances for export products, which will increase product costs and affect international competitiveness. Meanwhile, differences in carbon pricing policies across countries and regions increase compliance complexity for companies.

Market access requirements are increasing. More international buyers require suppliers to provide product carbon footprint certification and use it as an important basis for procurement decisions. Companies need to establish comprehensive carbon footprint accounting and certification systems to meet market requirements.

Supply chain restructuring pressure is increasing. Global low-carbon transition is driving supply chain reorganization, requiring companies to reassess and optimize supplier networks. This may bring short-term cost increases and operational adjustment pressures.

Response measures include: early deployment of low-carbon technologies to improve product competitiveness; improving carbon footprint accounting systems to meet certification requirements; optimizing export market structure to diversify risks; strengthening international cooperation to address trade barriers; participating in international standard-setting to protect corporate interests.

Additionally, companies need to: strengthen policy research to stay informed of policy trends; establish carbon tariff response plans to reduce compliance risks; develop low-carbon products to cultivate new competitive advantages; strengthen international exchange to learn from advanced experiences.

Conclusion:

Korea’s carbon neutrality process has profound impacts on corporate development. Against the backdrop of global joint response to climate change, corporate low-carbon transformation has become an inevitable trend. Systematic review of Korea’s greenhouse gas management policy system, corporate target-setting methods, key technical measures, and industry practice cases can provide valuable reference for companies.

Looking forward, companies need to promote low-carbon development from the following aspects:

First, establish a long-term development vision. Carbon neutrality is a long-term strategic task that companies should incorporate into their development strategies and develop clear transformation paths. They should fully recognize that low-carbon transformation is both a challenge and an opportunity, and actively adapt to and grasp development trends.

Second, strengthen innovation capacity building. Technological innovation is key to achieving emission reduction targets, and companies should increase R&D investment to promote clean technology breakthroughs. Meanwhile, they should focus on business model innovation to explore new development paths. In particular, they should leverage Korea’s advantages in digital technology to promote the integrated development of digitalization and low-carbon transformation.

Third, improve management systems. Establish sound carbon asset management systems to improve data quality and accounting capabilities. Strengthen internal assessment and incentive mechanism construction to mobilize enthusiasm at all levels. Meanwhile, strengthen risk management to improve the ability to address various challenges.