Supply Chain Carbon Reduction: Hyundai, Samsung, and POSCO Unite as a "One Team"

Ministry of Trade, Industry and Energy Selects 8 Consortiums for Carbon Partnership Project

31 Small and Medium-Sized Partner Companies Join

Targeting Annual Reduction of 20,000 Tons of Greenhouse Gas Emissions

Yonhap News Agency

Major anchor companies are forming "One Team" partnerships with their suppliers to reduce carbon emissions throughout the supply chain. As global carbon regulations expand beyond individual companies to the supply chain level, industries such as automobile manufacturing, semiconductors, shipbuilding, and steel are now actively working with their partner companies to secure carbon competitiveness.

On May 19, the Ministry of Trade, Industry and Energy announced at the Korean Chamber of Commerce and Industry that it will launch carbon reduction support for 31 small and medium-sized partner companies, in collaboration with eight consortiums: Hyundai Motor·Kia, Samsung Electronics, HD Korea Shipbuilding & Offshore Engineering, Samsung Display, LG Electronics, HL Mando, POSCO, and SK hynix, as part of the "2026 Industrial Supply Chain Carbon Partnership Project."

This project is designed to support carbon reduction and verification at the supply chain level in response to strengthened global supply chain carbon regulations. The government will allocate a total budget of 9.8 billion won, providing up to 50 to 60 percent of the cost for building carbon reduction facilities at partner companies, along with consulting for carbon emissions calculation and product carbon footprint (PCF) verification.

Notably, the project offers support structures tailored to the specific supply chain characteristics of each industry. Hyundai Motor·Kia implemented a "chain support model," where it provides cash support to first-tier suppliers, who in turn pass on reduction support to second-tier suppliers. Samsung Electronics, Samsung Display, LG Electronics, HL Mando, and SK hynix adopted a "synergy connection model," leveraging overlapping suppliers to spread reduction results across the entire industry. HD Korea Shipbuilding & Offshore Engineering is pursuing a "performance utilization expansion model," which converts reduction achievements into external carbon projects. POSCO is implementing a "downstream support model" to extend support to its customers.

The government expects this project to achieve an annual greenhouse gas reduction of approximately 20,000 tons. In addition, it anticipates that the program will strengthen Korea’s ability to respond to global carbon regulations, such as the EU Carbon Border Adjustment Mechanism (CBAM), battery regulations, and stricter supply chain due diligence requirements.

Regarding the carbon reduction targets for each consortium, Hyundai Motor·Kia has the largest target at 7,293 tCO2eq (tons of carbon dioxide equivalent), followed by Samsung Electronics at 4,196 tCO2eq, LG Electronics at 4,048 tCO2eq, and POSCO at 1,874 tCO2eq. In the shipbuilding sector, HD Korea Shipbuilding & Offshore Engineering aims for a reduction of 686 tCO2eq.

The Hyundai Motor·Kia consortium includes auto parts manufacturers such as Sangsin Brake, Sungwoo Hitech, Hwaseung, and Korea Move Next. These companies plan to introduce energy-saving facilities such as high-efficiency air compressors, solar power systems, and heat treatment equipment to reduce carbon emissions. The Samsung Electronics consortium includes Nepes, HB Technology, Wooik Semiconductor, and Power Logics, and will focus on improving the efficiency of semiconductor and display manufacturing processes.

The Ministry of Trade, Industry and Energy expects that this project will not only reduce carbon emissions but also enhance supply chain competitiveness. The automobile and electronics sectors aim to respond to global customer requirements by securing product carbon footprint data, while the shipbuilding and steel sectors plan to proactively address the EU CBAM and strengthened regulations from the International Maritime Organization (IMO).

Lee Minwoo, Director General for Industrial Policy, stated, "Carbon neutrality and industrial competitiveness are mutually complementary. The government and both large and small companies will work together to spread successful models for green transition that can overcome the wave of global carbon regulations."

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