"Carbon-Free Energy Supported by 5 Countries... No Issues with Semiconductor and AI Exports"

Lee Hoeseong CF Union Chairman Meeting
Expanding International Consensus on CFE
RE100 Achieved by Using Only Supply Proportion
Diverse Energy Sources Needed for Advanced Industries

Kang Kyung-sung, 1st Vice Minister of the Ministry of Trade, Industry and Energy (right in the photo), and Lee Hoe-sung, Chairman of the CF Federation, are briefing on the progress and future plans of the CFE Initiative at the Government Complex Sejong on the 29th. Photo by Ministry of Trade, Industry and Energy

More than five countries have officially expressed their support for the Carbon-Free Energy (CFE) initiative proposed by the South Korean government. The domestic CF Alliance, which is promoting the expansion of the CFE initiative, emphasized that exporting advanced products such as semiconductors and artificial intelligence (AI) does not necessarily require using 100% renewable energy.

On the 29th, Lee Hoe-sung, chairman of the CF Alliance, held a press conference at the Government Complex Sejong and stated, "Within a short period, five countries including the United Kingdom, the Netherlands, Saudi Arabia, and the United Arab Emirates have officially supported or expressed willingness to cooperate with the CFE initiative we proposed."

CFE is a concept that recognizes all energy sources that do not emit greenhouse gases as carbon-free energy from a technology-neutral perspective. It equally acknowledges not only renewable energy but also nuclear power, hydrogen, and carbon capture, utilization, and storage (CCUS) as CFE. Since President Yoon Suk-yeol proposed the CFE initiative at the UN General Assembly last September, and the CF Alliance was launched in October, South Korea has been focusing on building international consensus. Currently, 20 leading domestic companies representing major industries that account for 67% of South Korea’s industrial carbon emissions (as of 2020) participate in the CF Alliance.

At the press conference, Chairman Lee explained, "For the first time, the COP28 agreement last December explicitly mentioned not only renewable energy but also nuclear power and hydrogen as key carbon reduction measures. This confirms a significant paradigm shift in the international community that achieving carbon neutrality is realistically impossible with renewable energy alone, and all available carbon-free energy sources must be mobilized."

Regarding some criticisms that the CFE initiative aims to expand nuclear power, Chairman Lee said, "Both renewable energy and nuclear power are carbon-free energies, so they have a complementary relationship. To achieve the greater goal of carbon neutrality in our industry at minimal cost, a comprehensive approach that maximizes the use of various carbon-free energies such as renewable energy, nuclear power, hydrogen, and CCUS is necessary."

As the South Korean government emphasizes CFE, some have raised concerns about potential conflicts with RE100 (100% renewable energy). Some global companies, including Apple, require their suppliers to comply with RE100, and there are worries that following CFE could disrupt exports of advanced products like semiconductors.

In response, Chairman Lee rebutted, "Major advanced countries such as the United States, the United Kingdom, and France, which are simultaneously promoting advanced industrial development and carbon neutrality, are adopting strategies to harmoniously expand all carbon-free energies including renewable energy, nuclear power, and hydrogen to secure large-scale power supply."

While some global companies demand RE100 compliance from domestic companies, this requirement applies only to the proportion of products supplied to them. Therefore, even if companies follow the CFE initiative, it does not affect exports of advanced products like semiconductors. For example, if Company A’s sales to Apple account for 10%, then supplying 10% of its power from renewable energy satisfies the condition.

Due to the intermittent nature of renewable energy generation, the government believes that supplying power for large-scale demand in advanced industries such as semiconductors requires utilizing various power sources including nuclear power.

Chairman Lee also explained the difference between the CFE initiative and the '24/7 CFE Compact' promoted by companies like Google. The 24/7 CFE requires companies to use carbon-free power in real-time. In contrast, the CFE initiative, like RE100, adopts an annual settlement approach but aims for a phased approach toward real-time procurement in the long term.

Implementing real-time usage fully from the start is nearly impossible due to current technical limitations and the heavy burden on companies. The CFE initiative includes not only carbon-free power usage (Scope 1) but also substantial carbon reduction in production processes (Scope 2), allowing various corporate efforts to be recognized as carbon reduction activities.

The CF Alliance plans to form a global CFE working group this year with participation from major countries to develop a CFE certification system for verifying corporate carbon-free energy usage. It also intends to lay the groundwork for domestic and international expansion of CFE through participation in key bilateral and multilateral international meetings.

This content was produced with the assistance of AI translation services.