POSCO, No. 1 in emissions, more than operating profit
90% of the top 100 emitting companies pay
Factors that increase electricity bills due to rising costs
“Estimated Chi… The inevitable process” objection also
After President Moon Jae-in declared in the National Assembly last year that the so-called “2050 net zero” to achieve carbon neutrality by 2050, a bill to impose a carbon tax was recently proposed, and related discussions are in earnest. The business community is concerned that the rapid and excessive introduction of carbon taxes will place a huge burden on business management and is calling for a cautious approach.
The Federation of Korean Businessmen announced on the 31st that an additional tax of KRW 7.3 trillion to KRW 36.3 trillion will be incurred annually as a result of estimating the burden of introducing a carbon tax for each scenario based on greenhouse gas emissions in 2019.
On the assumption that the carbon tax is lumped according to the emissions of 908 emission sources registered in the 2019 Greenhouse Gas Energy Target Management Statement of the Ministry of Environment, the FKI charges a carbon tax of $10, $30, and $50 per ton of carbon dioxide equivalent (tCO2eq). We assumed three scenarios.
As a result of the analysis, it is estimated that the emission sources will bear a carbon tax of 7.3 trillion won, 21.8 trillion won, and 36.3 trillion won, respectively, for each scenario. In addition, while the top 100 emitters in terms of emissions pay 89.6% of the total carbon tax, the ratio of carbon tax to operating profit of these companies was also 10.8%, 32.3%, and 53.8% by scenario. In the case of POSCO, which has the highest carbon emissions, operating profit in 2019 is KRW 3.8689 billion, and the carbon tax borne by scenarios is 9778 billion KRW (25.3% of operating profit), 2,933.3 billion KRW (75.8%), and 4,8889 billion KRW (126.4 billion). %).
As for the amount of burden by industry, power generation energy companies are the most based on the mid-range scenario. The FKI pointed out that it could act as a factor in raising electricity rates due to rising costs.
There was a refutation that the FKI made exaggerated estimates. Ahn Joon-gwan, a senior research fellow at the Institute for Climate Change Action, said, “The introduction of a carbon tax will not relieve the burden on companies, but the economic community tends to overestimate the amount of damage.” It claimed to be incurred, but it wasn’t.”
The FKI explained that the figures are not exaggerated considering that the International Monetary Fund (IMF) and the World Bank each presented an appropriate carbon price at $75 and $50~100 per ton converted in 2030. The bill recently proposed to the National Assembly includes a plan to gradually raise the carbon tax from 40,000 won per ton converted this year to 80,000 won by 2025.
It remains a question whether a carbon tax should already be introduced in Korea. As of May last year, 24 countries introduced a carbon tax, and among the top 10 countries with greenhouse gas emissions, only Japan and Canada introduced a carbon tax. Other countries that have introduced a carbon tax include Sweden, Switzerland and Finland, which have low greenhouse gas emissions and a high proportion of renewable energy generation. China, the world’s No. 1 emission company, has no intention of charging a carbon tax, and the second-largest United States has a plan to invest 451 trillion won in clean energy, eco-friendly transportation, eco-friendly industrial processes and materials research over the next 10 years before imposing a carbon tax. Through this, a virtuous cycle of existing jobs is promoted.
FKI’s Corporate Policy Officer Yu Hwan-ik said, “Korea has a higher proportion of manufacturing industries than major countries, so it is expected to have a great difficulty in transitioning to low carbon in the industrial sector.” You can do it, so you have to be careful.”
Research Fellow Ahn said, “In order to realize the 2050 net zero, the introduction of carbon tax is an inevitable process. We have to solve the current issues first,” he emphasized.
Reporters Gicheon Na and Hyejeong Nam [email protected]
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