2022 Highlights
Net zero Roadmap
Net zero Roadmap
Scope 1 & 2 Net Zero Roadmap
SK bioscience has analyzed the GHG emissions of all its sites using the methodology proposed by the Science Based Targets initiative(SBTi). Based on this analysis, we have refined our goals and implementation strategies to achieve net zero GHG emissions by 2031. In Scope 1, the majority of GHG emissions have come from the use of LNG fuel in Andong L HOUSE boilers. To achieve the conversion target, we align with the government’s plan to supply and expand hydrogen energy infrastructure. For Scope 2, most GHG emissions have resulted from the use of electricity. To reduce these emissions, we plan to sign a renewable Power Purchase Agreement (PPA).
2031 Net Zero Roadmap
Scope 1 & 2 Net Zero Scenario
Direct GHG emissions (Scope 1) - Hydrogen energy transition scenario
Scope 1 direct GHG emissions resulting from stationary combustion of fuels account for 29% of the total emissions, with over 97% emitted from Andong L HOUSE’s LNG boiler. While hydrogen energy is gaining attention as a clean energy source, it is expected to take time for the overall market environment to stabilize, involving factors like demand/supply, regulations/policies, and infrastructure. Therefore, SK bioscience plans to gradually start blending hydrogen in accordance with the government’s plan to supply and expand hydrogen infrastructure. We will remain flexible and adjust the blending ratio based on upcoming hydrogen legislation and price situations. Our goal is to aggressively expand the blending ratio once the hydrogen market achieves relative stability, ultimately achieving 100% hydrogen fuel conversion and net zero emissions by 2031.
Indirect GHG Emissions (Scope 2) ? Renewable Energy Transition Scenario
Approximately 70% of SK bioscience’s GHG emissions come from Scope 2, and 99% of these emissions stem from electricity usage. Therefore, a key component of SK bioscience’s Net Zero strategy is to convert existing fossil fuel-based power sources to renewable energy. To achieve this, SK bioscience aims to reduce emissions by expanding the use of renewable energy through Power Purchase Agreement(PPA) contracts. The target date will be updated as we expand Andong L HOUSE and construct new infrastructure, such as the Songdo Global R&PD Center. Moreover, we will maintain a flexible approach to address the risks posed by climate change in the rapidly changing domestic and international business environment
Analyzing the financial impact of a Net Zero Scenario
Based on the IEA1)’s SDS2) climate change scenario, we calculated the impact of energy & carbon costs(Value at Risk), which represents the influence of Net Zero implementation at business sites on financial profit and loss. We found that achieving Net Zero will alleviate the burden of energy & carbon costs in the medium to long term. In the short term, the cost burden is expected to rise as renewable energy costs increase. However, energy & carbon costs are anticipated to decrease by 2028, reflecting the introduction of a carbon pricing system policy in the SDS scenario andt he expected stabilization of prices due to the government’s policy to expand hydrogen infrastructure. Subsequently, cost savings are expected to average about KRW 1.2 billion per year until 2031 when the net zero goal is achieved, thus providing a financial benefit for SK bioscience. The scope of the benefit is expected to expand further in the future when the supply of eco-friendly energy infrastructure, such as renewable energy and hydrogen, stabilizes.
Value at Risk of Energy & Carbon Costs
- 1) IEA: International Energy Agency
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2) IEA Sustainable Development Scenario(SDS): A scenario that assumes the achievement of the sustainable energy goals recommended by the UN SDGs, consistent with the goals of the Paris Climate Agreement.
- Carbon cost (KRW/tCO2eq): Increases from KRW 49,109/tCO2eq in 2021 to KRW 136,679/tCO2eq in 2031 based on IEA Sustainable Development Scenario (SDS) data.
- PPA Tariff (KRW): Calculated using data on electricity bill increases over the past 10 years and forecasts ofG erman industrial power tariff costs; assuming a minimum of KRW 150 and a maximum of KRW 242