The national control tower and investment plan must be strengthened, and long-standing problems such as lack of collaboration between ministries must be addressed first.
In order to maintain industrial competitiveness while achieving the goal of carbon neutrality, regulations are limited. Systematic and step-by-step adaptation is required.
It is necessary to increase acceptance and support the cultural power of citizens through constant education in civil society, children and youth.

The recent G7 summit was held in Cornwall, England. Because of Corona 19, the leaders of major countries who met after two years dealt with carbon neutrality as a key topic along with infectious disease response and human rights. Leaders of major countries agreed that in order to achieve the 2050 carbon-neutral goal, global cooperation and rule-setting are necessary along with the efforts of each country. Carbon neutrality has fallen to the fire of the feet of the whole industry, nation, and individual. It is demanding sweeping changes from energy to industrial methods to lifestyles and mobility. Experts in industry, academia, and research have ordered specific actions for carbon neutrality.

<interlocutor> Min Dong-joon, Professor at Yonsei University, Chairman of the Green Steel Committee, Park Hyeon, Executive Vice President, POSCO (Environmental Business Dept., Director) Kyung-ho Shin, Director of the Institute for Science and Technology Job Promotion, President of the Korea Institute of Metals and Materials Young-sook Yoo, Chairman of the Climate Change Center, Former Minister of Environment Jang Woong-seong, Director of the Institute of Convergence Innovation, Inha University Eun-mi Jeong, Institute for Industrial Economics & Trade, Growth Engine Industry Research Head of Division Jeong Jin-ho CEO of Cartech H Ahn Gyeong-ae Digital Times ICT Science Division Director

◇ Jang Woong-seong = It is predicted that by 2100, it will cost about 2800 trillion won to relieve damages caused by climate change alone. After the launch of the US Biden government, the powerhouses competitively issued a 2050 carbon neutral declaration, and large-scale public and private investment became an irreversible flow. We, too, must unite the public and the private sector to bring about change. Developed countries such as the United Kingdom and the United States have completed related research in very specific ways to achieve carbon neutrality by 2050, and are also reaching consensus with the public. Korea is a country that emits a lot of carbon dioxide. Both the total emissions of the country and the emissions per capita are high. The amount of steel consumed per capita is also high. In developed countries, it peaked in the 1970s and 1980s and declined, but we still use 1,300kg per person. This is because manufacturing accounts for about 28% of GDP (gross domestic product) and makes a living from manufacturing exports. Recently, capital around the world is also focusing on carbon neutrality and ESG (environmental, social, governance) areas. If you do not practice ESG, it has become an era in which you are treated as a fool in the market.

◇Min Dong-jun = Now is the time to go beyond the grand discourse for carbon neutrality and prepare for action. So far, a globally standardized fossil energy price system has been applied, but green energy is differentiated depending on the production environment between countries. in that respect

For Korea, which is centered on manufacturing, to maintain national competitiveness and carbon neutrality at the same time, finding a green energy source that can sustain the lives and manufacturing of 50 million people is an urgent priority. Just as President Park Chung-hee created the current flagship and key industries such as highways, oil, steel, shipbuilding, and automobiles through the 5-year economic development plan in the 1960s, we must approach from the perspective of national reform. As the president declared carbon neutrality, we must come up with bold plans, incentives, and infrastructure investments suitable for him.

◇Yoo Young-sook = It is carbon neutral that it is difficult to stand on the 100th floor and feel precarious. Europe has continued to reduce carbon emissions since peaking in 1990, far ahead of us. The peak of carbon emissions in the United States was in 2007, and in Japan in 2013. We are in 2018. We need to reach carbon neutrality in half the time, which the EU aims to achieve in 60 years after peaking its emissions. It is a matter of the existence of the Republic of Korea, but it is too lax.

◇Jeong Eun-mi = In line with the direction of carbon neutrality, the Korean government has also set high goals. As we have a long way to go and are busy, we need to hurry up and make concrete means. In particular, we need a means for players to be confident.

First, we need to strengthen the national control tower and investment plan for carbon neutrality. The ‘2050 Carbon Neutrality Committee’, which was launched as a control tower, should be empowered to have the ability to execute policies, not just advisory and deliberative roles.

Preparations for the government’s preliminary feasibility study for carbon-neutral R&D investment are also starting, and at this rate, the budget will be executed from 2023 at the earliest. You need to speed up. A budget appropriate to the scale is also required. The Ministry of Science and ICT says it will invest a total of 1.8 trillion won to promote 10 R&D projects for carbon neutrality for 10 years. Approximately 18 billion won is allocated per task per year. However, the development of hydrogen reduction steelmaking technology alone is insufficient by 1.8 trillion won. You need to increase your investment.

◇Shinkyung = Everything from energy to materials to the entire industrial structure must change. In the case of energy, it is necessary to create a portfolio with the possibility open to various energy sources as well as renewable energy. In the case of the United States, it is said that it plans to increase nuclear power generation by 2050. We will expand green power and continue to develop hydrogen technology, but in the meantime, we must also find a solution to carbon emissions over the next 20 to 30 years.

◇Jeong Jin-ho= The issues of education and acceptability are also really important. The issue of cost burden for companies is also serious. However, I feel that the movements of foreign companies that I meet at industrial sites are much more agile than those of domestic companies. German and Japanese companies are visiting us to use carbon composite materials instead of metal in automobiles. These companies are planning to convert automotive metals to carbon fiber composites (CFRPs) by 2030 and are putting them into action. While promoting the hydrogen economy strategy, materials and parts are also changing accordingly.

◇ Ahn Gyeong-ae = Carbon neutrality has emerged as a key agenda for the government and the demands of the international community are becoming stronger, but if the government is pushed by speed and fails to faithfully prepare the contents, it will cause enormous side effects and post-costs, so it must be properly prepared from the beginning.

In particular, in order for policies to receive strong power within the government and lead to policies and investments, long-standing problems such as lack of collaboration between ministries, unrealistic preliminary examination system, and budget system need to be improved. Above all, the 2050 Carbon Neutrality Committee will have to operate as an organization with stronger execution power without stepping on the foot of the 4th Industrial Revolution Committee.

◇Min Dong-jun = I think the global agenda of carbon neutrality goes beyond competition between domestic and foreign companies and is a competition for survival among countries around the world, including Korea, China, and Japan. Countries around the world have established policies for technology, patents, trade, standards, border taxes, resources, carbon border taxes, and industrial reshoring, and are developing all-round competition mobilizing diplomacy, technology, and capital. The carbon neutral policy is not a simple environmental regulation. From the perspective of national competitiveness, it is necessary to establish a national strategy that links energy, diplomacy, trade, and capital. If the government fails to establish solidarity and cooperative relationships involving companies and private, financial, universities, and research communities under a meticulous strategy, Korea will inevitably fall into the ‘Valley of Death from Carbon Neutral Foot’.

◇Park Hyeon= Manufacturing accounts for 30% of all industries in Korea. Among developed countries, Germany and Japan are relatively high. We believe that we should aim for the German and Japanese models. In the process of Korea’s entry into an advanced country, it is necessary to think over what kind of social and economic structure would be desirable.

Posco declared a carbon-neutral policy on December 11 last year after internal deliberation and discussions with the board of directors. Japanese steelmakers also declared carbon neutrality at the end of last year and this year. Since 2013, when steel production reached an all-time high, several blast furnaces have been shut down and production has significantly decreased, making it easier to reduce greenhouse gas emissions in Japan, and the burden of reduction felt by the Korean steel industry, which continues to produce solid production, is completely different. From our point of view, it is unthinkable to reduce carbon emissions by reducing production. There is no choice but to make more forward-looking and innovative efforts.

◇ Jang Woong-seong = The conflict between the US and China and the war for technological supremacy are expected to eventually lead to a carbon neutral war. China ranks first in the world in many advanced technologies. In the case of steel, it is an industry that directly and indirectly employs more than 100 million people worldwide and has an added value of 2.9 trillion dollars. It is the second largest after automobiles. However, producing 1 ton of steel requires 2 tons of carbon dioxide. Steel accounts for 30% of all industrial carbon dioxide emissions. Then, if steel disappears, is there an alternative for mankind? Even if a car is made of aluminum or a house is made of carbon fiber, aluminum causes more carbon dioxide at 11.3 tons per ton. Steel is serious because mankind needs a lot of it. In other words, mankind still living in the Iron Age has no alternative. Steel is 100% recycled, which is unrivaled. In such a situation, the new iron civilization began to compete for supremacy in the era of carbon neutrality. The US-China conflict and competition for technological supremacy are intensifying, but this war is expected to eventually lead to a carbon neutral war. Competitiveness at the level of individual companies is not a problem. New players with strengths in IT and environment, as well as existing players, must participate and unite.

◇Min Dong-jun = The success of the carbon-neutral strategy depends on the establishment and implementation of a green energy strategy, which is a necessary and sufficient condition for moving from electrification to hydrogen. In order to electrify industrial energy in addition to the electricity required for people’s lives, the green electricity supply capacity must be at least three times higher than the current level. It is to change the entire structure of the country. Currently, Korea stocks more than 90 days worth of oil as an energy source, but how much electricity energy can be stored in the case of electrification? Is it possible to build a power energy storage system and an electric power system, and build a tremendous green infrastructure that changes natural gas into hydrogen? In addition, stranding or sunk costs due to the greening of the current manufacturing process are still a black box. Even if the government and industry complete technology for carbon neutrality, it is useless if electricity and hydrogen are not stably supplied. Green infrastructure policy should be a top priority national strategy.

◇Park Hyun= As an energy source for carbon neutrality, we must first look at how much demand can be met with renewable energy. Other energy sources that do not emit carbon must also be considered, and although there is a long way to go before commercialization, nuclear fusion power generation, which is mentioned as one of the future energy sources, must be looked at from a long-term perspective.

A specific strategy for securing hydrogen must also be established, but hydrogen is characterized by being produced in places where most of it is used in large quantities. This is because there are more restrictions on transportation than other energy sources. Attempts to convert hydrogen into ammonia and transport it between countries stemmed from such concerns. In the case of POSCO, in order to operate hydrogen reduction steelworks, it will have to receive a large amount of supply through a pipeline from a nearby hydrogen complex or transport hydrogen converted into ammonia from abroad. Considering the current cost of making molten iron, the price of hydrogen should be considerably lower than it is now. Of course, if the world shares the cost of carbon neutrality, the time to secure the economic feasibility of hydrogen can be advanced.

◇Min Dong-joon = It is still questionable how much electricity demand in Korea will be in 2050 and whether new renewable energy such as wind power and solar power can handle it. In this regard, a K-energy strategy optimized for Korea’s energy environment must be created through precise demand forecasting and analysis. In addition to new and renewable energy, it is necessary to reexamine and establish nuclear energy strategies such as SMR (Small Module Reactor). It is hoped that balanced content will be included in the national energy strategy established by the government.

◇Jeong Eun-mi = Carbon neutrality requires an approach on a different scale. It should be a national resolution, not a responsibility of individual companies or industries. Social investments that change the game must be made. The problem is that the period given to Korea is short. We have to do it in a short period of time and meet European standards.

Europe, which started the change first, is a strategy to advance into the global market by conducting R&D and creating a business model. If you fall behind in competition with them, you could lose a huge market opportunity. We shouldn’t bring what they developed and we should have a competitive edge. Carbon neutrality is a new rule that changes global industry and competition with the same weight as digital transformation. In the face of a huge change, our society must properly prepare and demand it from the industry. There are too many holes because I had to make a sudden big change. Who will pay that much money? From the calculation of the size of the investment to the financing plan, it is necessary to be specific.

◇Ungseong Jang= While the industry is developing technology, it is necessary to organize where and how to distribute taxes and regulations imposed on companies and the amount of carbon dioxide captured.

We need to create order by specifically thinking about what kind of benefits will be given to places that work hard and how to encourage the development of eco-friendly technologies.

◇Yoo Young-suk = Since Korea has grown rapidly in a short period of time, there are parts that have not been thoroughly taken care of. The Ministry of Environment, too, was relatively less concerned with waste as it was focusing on environmental pollution issues. However, since we have potential, we believe that even though it is a serious and difficult situation, we can overcome it. Education is very important. We need to constantly talk to civil society and children and youth to increase their acceptance. All people must understand and change. The cultural power of citizens who buy products made from recycled waste without hesitation should be supported. Traditional oil companies such as Shell and BP are switching their main businesses from oil to clean energy and declaring that they will achieve carbon neutrality by 2050. It is also attempting to transform into a comprehensive chemical company rather than an oil refinery. Businesses can be the means and most powerful actors of carbon neutrality. When societies work together, we can achieve both growth and carbon neutrality.

◇Min Dong-joon = In order to maintain industrial competitiveness while achieving the goal of carbon neutrality, there are limits to regulatory policies alone. Just as a person who runs 100m in 15 seconds cannot be forced to run in 12 seconds, systematic and step-by-step adaptation is necessary. The global issue of carbon neutrality requires Korea not only to take a new position in world politics and diplomacy, but also to change in all areas of the city, manufacturing, service, and agricultural and fisheries industries. need.

◇ Ahn Gyeong-ae = I think the people are ready for change. However, even if you want to do it, there is a lack of manuals that guide you on what to practice in detail. It is meaningful for individuals to make efforts such as using tumblers instead of disposable cups and reducing the packaging of delivery food, but for a change in scale to occur, a device that systematically helps is needed. It is thought that the public consensus and carbon reduction effect will be much higher if life-friendly carbon reduction plans and manuals are created and shared, from daily life to consumption, distribution, and logistics.

◇Jeong Eun-mi = What is noteworthy is that Europe and China approach carbon neutrality as an opportunity for growth, not cost, but investment. But going this way leaves us with nothing but costs. We need to change the social perception and seize the opportunity. The industry that will make this a reality must also be nurtured. If a company makes a steel grade that can reduce the weight of a facility from 100 tons to 80 tons, the price should be compensated. No one talks about cost, and no one should talk about value. Again, civil society must have acceptance for production, consumption, and circulation of products that go to carbon neutrality. No one talks about how much electricity bills will rise if you use renewable energy. We need to ask companies, ‘How much can we reduce, and what do we need to support and prepare for?’

◇Shinhoho = It is necessary to actively nurture the carbon-negative industry that absorbs carbon dioxide through photosynthesis of marine plankton or plants and produces fertilizers and high-functional foods. We also need a way to lower carbon by concentrating such industries around industrial sites that emit a lot of carbon.

◇Min Dong-jun= Industry is an organism that optimizes and adapts to a given environment. If the country entrusts homework only to companies and regulates them, companies need to worry about the carbon leak phenomenon, in which companies contemplate moving to a country that is favorable to carbon neutrality for survival. In order to evolve into a carbon-neutral economy, it is necessary to change the structure of the entire country and supplement the limitations of energy discontinuity with policies, finance, and technology. Bridging the discontinuity is not just technology. Efforts to persuade the public are also needed. The ambivalent policy that tells companies to do their own thing with the money they earn should not be used. If companies fail to make this change, the local economy and jobs will also suffer. To achieve carbon neutrality, you have to do a quantum jump like jumping over a cliff. 30 years isn’t a long time. Time is too short. In order for the industry to operate a production process that fits carbon neutrality, technology development and verification must be completed by 2040 at the latest, and facility investment must begin.

◇Woongseong Jang = In the steel industry, Korea is preparing for a challenge with a brand tentatively named ‘K-Gift’. The industrial cycle must be completely rewritten. The industrial structure must evolve by converging eco-friendly steelmaking, digital processing, and manufacturing services.

To this end, a platform strategy from the perspective of the entire industrial ecosystem is needed. Korea has developed and commercialized the world’s first FINEX steelmaking process in 2007. If you want to go to hydrogen reduction ironworks, you must have this technology. We are the only company that has mass-produced this technology. It is the biggest weapon that can occupy an advantageous position in the competition for supremacy. It is an opportunity to seize the hegemony of the New Iron Age. To this end, it is necessary to stably create and supply electricity and hydrogen in a green way. It is not simply a matter of technological development, but a matter of changing the map of Pohang.

◇Park Hyeon= For the steel industry, hydrogen reduction steel is the ultimate solution in the era of carbon neutrality. Rather than repeating the controversy over whether it is realistically possible, now is the time to put it into practice. We have been developing related technologies since the early 2000s, and it is expected that it will take a considerable amount of time in the future, but we will do our best to develop the technology by gathering the strength of related industry, academia, and research institutes. The key is to stably secure hydrogen in quantity and economy.

POSCO’s annual crude steel capacity is about 38 million tons, and if hydrogen reduction steel is applied, about 3.7 million tons of hydrogen are needed annually for reduction. In addition, in hydrogen reduction steelmaking, the process of reducing iron ore in a high-temperature blast furnace and then melting it is carried out separately, and green electricity must be used for this process. Based on the power capacity used, 3.7 GW (gigawatts) of electricity is required, which is quite large. Such green hydrogen and green power infrastructure must be established at the national level. A detailed roadmap must be established through national consensus and public-private agreements.

◇Min Dong-joon = More than 7 billion people around the world use 200kg of steel per person per year, and if we, which boasts the world’s highest energy efficiency, reduce our production scale, countries with less efficiency than us will produce steel while emitting more carbon dioxide. Remember. The steel industry’s responsibility is to perfect steel processes that maintain a comparative advantage over other countries in terms of carbon dioxide emissions. These technological competitions should be done with the utmost sincerity in that they will influence the national economy in the future. It should not be linked to political issues, and I hope that the government will carry out in an orderly manner under well-coordinated policies, programs, and financial policies. The Korean steel industry has valuable experience in developing and commercializing a new steel manufacturing process called FINEX over 20 years. The technological experience accumulated over 25 years from the basic research stage to the 2 million ton scale can be said to be a tremendous asset that cannot be found anywhere else in the world.

◇Park Hyun = Global cooperation is essential as the related investment burden is high. POSCO plans to hold a meeting in Korea in the fall after proposing international cooperation to the World Steel Association. Since 2002, POSCO has established a company-wide climate change strategy and sought specific action plans. If there is a recent change, in the past, the international community and the government mainly paid attention to corporate climate change measures, but now investors and clients are demanding it. POSCO is also paying attention to the activities of the TCFD (Financial Disclosure Council on Climate Change), which is organized around BlackRock. Many of our customers are not limited to reducing their own greenhouse gases, but are demanding that their suppliers reduce as well. In the case of automotive steel sheets, it is a request to develop and supply high-strength steel sheets that are lighter in weight and consume less fuel. These customer trends can be an opportunity for us to secure differentiated competitiveness. The company introduced the group’s carbon-neutral integrated solution, the ‘eAutopos’ brand, earlier this year.

◇Min Dong-joon= It took 21 years and a huge budget of 2.4 trillion won to make molten iron come out of a 2 million ton commercial facility in the basic research stage of the FINEX method, the world’s first commercialized smelting reduction process. Based on this experience, in order to develop the hydrogen reduction steelmaking process necessary for carbon neutrality, at least four FINEX-level technology development projects should be promoted. More than 20 years of patience and bold development investment of more than trillions of won are required.

In that respect, the size and duration of the national carbon-neutral technology development policy task currently pursued by the government is very worrisome. This is because, in the case of key industries, empirical research for commercialization is more important than basic research.

Such empirical research is a huge risk in that it is a comprehensive technology development that secures reliability across materials, process control, lifespan, productivity, and maintenance required for facilities, and at the same time provides new EPC (engineering, procurement, and construction) business opportunities. For reference, in the case of Japan and Europe, it cost about 100 million dollars to build a small 10-ton hydrogen steel test facility, and 300 million to 400 million dollars are required for basic facility investment alone. It is time for solidarity and cooperation between the government and the private sector.

◇ Jang Woong-seong = The domestic steel market is worth 100 trillion won, but the market for making steel mills is worth hundreds of trillion won. You have to invest and capture that market. The technology must be perfected while making large-scale facilities. It shouldn’t be like playing with a house, but it should produce smart results properly. Now, the steel industry is not an old industry subject to restructuring, but is recognized as a smart and eco-friendly new industry, and opportunities and markets must be created so that young generations in their 20s and 30s can enter this industry with a vision.

◇Shinkyungho = The key to change is for civil society to have an acceptance of carbon neutrality. That is the starting point, and on top of that, national infrastructure, green power, and corporate changes must follow. In addition, since carbon neutrality does not suddenly come true, related R&D must be continuously promoted and an ecosystem such as recycling must be created to deal with accumulated carbon before carbon neutrality.

In addition to manufacturing process innovation, recycling industries such as CFRP (carbon fiber reinforced plastic) are also important.

◇Jeong Jin-ho= Recycling is not just about reducing carbon dioxide, but is a very serious and important environmental issue. Most of the waste is landfilled or incinerated, which causes many environmental problems. The burning process consumes a lot of energy and releases a lot of carbon dioxide. To solve this problem, recycling should be done as much as possible.

◇Min Dong-jun = Carbon neutrality is an industrial transition, not technology development. You must teleport from point A to point B by taking the elevator, not the stairs. This means that it is not a gradual change, but a violent transition. The approach to carbon neutrality should be promoted as a basic premise of reduction in the production area. In cases where products are imported and used, such as in the United States and Europe, the optical illusion of shifting carbon dioxide emissions required for production to the country of manufacture is noteworthy. We need to properly look at the relationship between production and consumption of CO2 emissions. Social acceptance of eco-friendly products is still insufficient. Education to increase receptivity is very important. In order for true carbon neutrality to take place, whether you want it or not, social costs increase, and there must be an agreement that the public will pay a certain portion. As everyone knows, reducing the manufacturing industry can drastically reduce CO2 emissions. Then what are you going to eat? Given that manufacturing is our way of life, manufacturing companies must seriously develop and adapt to technology. In addition, it is necessary to conduct a carbon-neutral social campaign in which the government, businesses, and citizens agree and share the burden under the leadership of the state. In front of carbon neutrality, everyone is a sinner. Only when the national infrastructure is built on the premise of social acceptability can companies change with competitiveness.

◇Jeong Jin-ho = It is not because the government forced companies to change. Companies and capital move quickly if the market and consumers want it, even if it is not a policy. Consumer awareness drives companies. So education is important. Since we said that we would supply materials by recycling carbon fiber composite materials, many companies have made related requests. From automobiles to footwear and furniture companies, there is high demand to increase material recycling rates. They offer us to do a renewable material project together. Carbon neutrality can be a burden for businesses, but it can also be an opportunity.

◇Min Dong-joon = Our country’s resource circulation economy system should be built around the big axis of carbon neutrality. For example, by introducing the eco-design concept of German automobiles and increasing the recyclability of automobile parts, a virtuous cycle structure must be elaborated.

◇ Ahn Kyung-ae = There is also concern about the ‘carbon neutrality response gap’ between large companies and medium-sized and small businesses. Large companies are recently speeding up ESG management and making aggressive changes and investments, but small and medium-sized companies that lack investment capacity and information are inevitably slow to move. It is necessary to follow government-level guidance and support, and it is necessary to operate and lead an innovation ecosystem in which large companies lead medium and small companies in their supply chain.

◇Jeong Eun-mi = In order for resource recycling to work properly, a cycle covering product production, sales, disposal, collection, and reuse must operate. There is a limit for the Ministry of Environment to make a reuse policy.

In addition, it is also a problem that there is no indication of which product is made of which ingredient and material. Imported cars clearly specify which parts are made of which material, so it is easy to recycle when scrapped and dismantled. In our country, that is not possible. Only then can recycling be possible. Both producers and consumers should know and systematically recycle.

◇Min Dong-jun = When you buy snacks, the ingredients are written on the bag. Likewise, for home appliances such as TVs, if you indicate how much copper and other components are included in each part and model, the collector will be able to easily calculate. Opportunities can be created for businesses.

Organized = Reporter Ahn Gyeong-ae naturean@dt.co.kr

Photo = Reporter Park Dong-wook fufus@

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