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One of South Korea’s largest conglomerates faces a backlash from activist groups after finalizing a major Australian liquefied natural gas deal months after promising to end new oil and gas investments abroad.
The scrutiny of SK Group, one of the leading Asian oil producers, electric vehicle batteries i computer chips, comes when activists focus on overseas oil and gas projects, estimated at more than $ 100 billion, after successful campaigns to prevent companies and countries from investing in coal.
Environmental groups say SK’s decision to spend $ 1.4 billion on the development of the Barossa-Caldita offshore site contradicts the promise made in November abandon new investments in fossil fuels. The promise of SK, Korea’s third-largest conglomerate, was part of a key axis for the environmental, social and governance investments led by Chey Tae-won, its chairman and major shareholder.
“The large amount of greenhouse gases in the Barossa-Caldita project will raise serious doubts about the ESG initiative of SK Group and, most importantly, undermine global efforts to mitigate climate change by reducing greenhouse gas emissions greenhouse, ”said a letter sent to Chey by dozens of South Korean, Australian and other environmental groups, including Greenpeace.
SK’s power unit said the development would reduce “almost all” carbon emissions by capturing and storing carbon, at incipient technology which traps CO2 and leads it to deep underground deposits, as well as by purchasing carbon credits.
“Our investment was made on the condition that LNG be developed in an environmentally friendly and low-carbon way,” SK E&S said.
Chey, who controls the group’s more than $ 200 billion in assets, has been overseeing for several years readjustment of the SK portfolio, including multi-billion dollar divestments in oil and gas exploration and distribution assets.
Barossa-Caldita, the Timor Sea project led by Australian producer Santos, is expected to supply LNG to South Korea for 20 years from 2025. SK argued that Barossa-Caldita should not be considered a new development. , noting that he has spent $ 600 million on the project since 2012.
Activists described SK’s claims for carbon-free LNG, which is a natural gas that has cooled so that it can be transported to ships, as a “blatant green wash.”
“The so-called CO2-free LNG. . . not only is it misleading, but it also lacks economic or technical viability. . . any attempt to wash away the development of fossil fuels with unverified CCS plans that lack technological or economic viability is unacceptable, ”the letter said.
The dispute is taking place in a context of growing pressure on the oil and gas sector as governments they promise to reduce carbon emissions.
The International Energy Agency warned last month that to keep global warming under control, all new oil and gas exploration projects must be halted this year and a multi-million dollar increase in spending on low-carbon technologies is urgently needed.
South Korea was the eighth largest emitter of carbon last year and gets only 5% of its electricity from renewable sources. The country is struggling to prove how it will achieve President Moon Jae-in’s promise to reach carbon neutrality by 2050.
Many companies and policymakers believe that LNG is a crucial transitional fuel for highly coal-dependent economies, such as South Korea.
However, environmentalists said that beyond the carbon emitted by final consumption, LNG also releases significant amounts of greenhouse gases during processes such as extraction, processing and transportation.
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