Climate Change Response
Net Zero
Response System
What Climate Change Response Means to SK Gas
“Net Zero is no longer a choice, but a necessity.”
As an energy company, SK Gas aims to meet global demands for climate change response by becoming a Net Zero Solution Provider. Expanding its business from traditional LPG to LNG, and ultimately transitioning to hydrogen and ammonia businesses, SK Gas intends to lead the Net Zero era. By transforming its business portfolio towards low-carbon solutions, SK Gas plans to achieve Net Zero. Despite the challenges and burdens, SK Gas is determined to turn this crisis into an opportunity and actively leverage it as a new business chance.
Role of Management
SK Gas operates a company-wide C-level Consultative Body led by the CEO to address major corporate risks, including climate change. C-level Consultative Body, serving as the risk management control tower, includes heads of various business divisions and the ESG Operation Head, with the CEO taking responsibility for major decisions.
Management Support Division Head reviews climate-related risks and opportunities and reports the findings to the C-level Consultative Body, which meets bi-weekly for discussion and response planning. Key issues are reported to the board and the ESG committee through the CEO. The CEO's KPI includes climate change response and Net Zero goals, reflecting performance in the annual ESG management infrastructure plan.
Based on the Net Zero Solution Provider vision, SK Gas aims to transition to low and zero-carbon businesses and comprehensively respond to climate change. The board will continue to monitor feasible greenhouse gas reduction targets and the step-by-step implementation of energy transition solutions.
- Board of Directors
- ESG Committee
- Company-wide SHE Chief (CEO)
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C-level Consultative Body
- Head of Eco Energy Division
- Head of Trading Division
- Head of Solution Division
- Head of Connect Division
- Head of Technology Infrastructure Division
- Head of Business Support Division
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- Head of Business Support Division
- ESG Operations Chief
- ESG Operations Group
Consultation
- Site SHE Chief (Head of Technology Infrastructure Division)
- SHE Promotion Group (Head)
- SHE Planning Group
- Site SHE Team
Reporting upwards, monitoring downwards
2030 Net Zero Declaration
SK Gas declared its Net Zero commitment in June 2021, aiming to achieve Net Zero not only at its business sites but across the entire value chain by incorporating all greenhouse gas emissions. The company established 'Net Zero Operation' and 'Net Zero Solution Provider' as its climate change response strategies.
Reduction achievements are published through the Sustainability Report, company website, and participation in initiatives such as CDP*, with annual progress disclosed.
- * CDP (Carbon Disclosure Project): A global project requesting information disclosure on climate change issues from major listed companies worldwide, on behalf of financial investment institutions (SK Gas first participated in July 2021).
Response Strategies and Goals
Net Zero Strategy
SK Gas has established 'Net Zero Operation' as its short-term strategy and 'Net Zero Solution Provider' as its long-term climate change response strategy. The company aims to achieve Net Zero at its business sites by reducing greenhouse gas emissions and enhancing energy consumption efficiency. Subsequently, it plans to achieve Net Zero across the entire value chain, including Scope 3 emissions, by expanding eco-friendly hydrogen and ammonia businesses, balancing business growth and environmental impact reduction for a sustainable future (Sustainable Energy, Better Future).
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Vision: Sustainable Energy, Better Future
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Strategy
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1. Mid-term Transition Strategy: Net Zero Operation
- Key Points
- Reduce direct emissions from processes, enhance energy consumption efficiency
- Achieve Net Zero at business sites
- Scope of Reduction
- Scope 1: Direct emissions from business sites
- Scope 2: Indirect emissions from third-party energy (electricity, steam, etc.)
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2. Long-term Transition Strategy: Net Zero Solution Provider
- Key Points
- Transition from LPG/LNG-focused portfolio to hydrogen-focused Zero Carbon portfolio
- Achieve Net Zero across the value chain
- Scope of Reduction
- Scope 3: Emissions from the consumption of products sold by the company, and emissions across the entire value chain
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From Lower to Zero, Carbon Portfolio Transition
- LPG: Affordable/Cleaner
- LNG: Reliable
- Ammonia/Hydrogen: Just
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Net Zero Goal
In active response to global climate change, SK Gas declared its 2030 Net Zero goal. The company aims to achieve this by introducing seawater heat exchangers, transitioning to electric vehicles, and adopting electric heaters for Scope 1 reduction, as well as procuring renewable energy through Power Purchase Agreements (PPAs) for Scope 2 reduction.
2030 Net Zero Roadmap
As of the end of December 2023
Baseline Year Emission Volume: 35,478 tCO2eq
- 1. LPG Portfolio Transition
- 2. Seawater Heat Exchanger
- 3. First PPA Procurement
- 4. Electric Heater Adoption
- 5. Second PPA Procurement
- 2030 Net Zero Goal (2030)
Baseline Year Emissions (SBTi Standard Reduction), Net Zero Goal, Actual Emissions (2021-2023)
- * As the SBTi Oil & Gas Industry Guide is not yet published, self-verification was conducted following the General Guide.
While SK Gas has been steadily implementing its Net Zero plans, there have been technological, market, and regulatory changes since the 2021 Net Zero declaration. Given the accelerating pace of these changes, an update to the reduction plan is necessary to ensure the achievement of the 2030 target. Therefore, in 2024, SK Gas plans to conduct a thorough review of the technical and financial feasibility of the Net Zero plan.
SK Gas measures and manages greenhouse gas emissions at major sites including Ulsan Terminal, Pyeongtaek Terminal, G.Hub, and the headquarters, with third-party verification for the performance of all sites.
| Company-wide | Unit | 2024 | 2027 | 2030 |
|---|---|---|---|---|
| BAU | tCO2eq | 40,079 | 82,416 | 83,617 |
| Reduction | tCO2eq | 12,715 | 33,027 | 83,617 |
| Emissions after Reduction | tCO2eq | 27,364 | 49,389 | 0 |
| Reduction Rate Compared to BAU | % | 31.7 | 40.1 | 100 |
| Headquarters | Unit | 2024 | 2027 | 2030 |
|---|---|---|---|---|
| BAU | tCO2eq | 2,418 | 2,300 | 2,300 |
| Reduction | tCO2eq | 1,305 | 1,402 | 2,300 |
| Emissions after Reduction | tCO2eq | 1,113 | 898 | 0 |
| Reduction Rate Compared to BAU | % | 54.0 | 61.0 | 100 |
| Ulsan Terminal | Unit | 2024 | 2027 | 2030 |
|---|---|---|---|---|
| BAU | tCO2eq | 31,537 | 26,378 | 27,229 |
| Reduction | tCO2eq | 6,506 | 12,810 | 27,229 |
| Emissions after Reduction | tCO2eq | 25,031 | 13,568 | 0 |
| Reduction Rate Compared to BAU | % | 20.6 | 48.6 | 100 |
| Pyeongtaek Terminal | Unit | 2024 | 2027 | 2030 |
|---|---|---|---|---|
| BAU | tCO2eq | 8,746 | 11,582 | 11,932 |
| Reduction | tCO2eq | 1,596 | 1,983 | 11,932 |
| Emissions after Reduction | tCO2eq | 7,150 | 9,599 | 0 |
| Reduction Rate Compared to BAU | % | 18.2 | 17.1 | 100 |
| G.Hub | Unit | 2024 | 2027 | 2030 |
|---|---|---|---|---|
| BAU | tCO2eq | 1,930 | 1,810 | 1,810 |
| Reduction | tCO2eq | 1,159 | 1,219 | 1,810 |
| Emissions after Reduction | tCO2eq | 771 | 591 | 0 |
| Reduction Rate Compared to BAU | % | 60.1 | 67.3 | 100 |
Greenhouse Gases
Reduction Activities
Energy Usage Reduction and Efficiency Activities
1. Introduction of Seawater Heat Exchangers
During the import of LPG, the temperature of propane at approximately -40°C is raised to about 3°C using a fire heater before storage in a cavern. This process accounts for 99% of Scope 1 emissions. SK Gas plans to introduce seawater heat exchangers in the second half of 2024 to reduce these emissions. The introduction of seawater heat exchangers is expected to reduce the annual fuel consumption of propane fire heaters by 3,250 tons, resulting in a reduction of 9,500 tCO2eq in greenhouse gas emissions.
2. Introduction of Electric Heaters
In addition to seawater heat exchangers, SK Gas plans to transition from fire heaters to electric heaters to reduce Scope 1 emissions as part of its 2030 Net Zero goal. The introduction of electric heaters is expected to reduce the annual fuel consumption of propane fire heaters by 11,000 tons, resulting in a reduction of 39,000 tCO2eq in greenhouse gas emissions. To offset the additional Scope 2 emissions from electric heaters, SK Gas plans to procure power purchase agreements (PPA) to achieve Net Zero.
3. Introduction of Central Heating and Cooling System
In 2022, SK Gas introduced a central control system for heating and cooling at the Ulsan Terminal to reduce energy consumption, resulting in an annual reduction of 120 tCO2eq in greenhouse gas emissions.
Greenhouse Gas Reduction Activities
1. RE100 Implementation
SK Gas uses electricity generated from renewable energy installations (solar power) at its business sites and purchases renewable energy certificates (REC) to reduce greenhouse gases. In 2023, SK Gas invested approximately 700 million KRW to purchase RECs, achieving a reduction of 4,000 tCO2eq in greenhouse gas emissions. Additionally, solar power installations at three other sites (Ulsan, Pyeongtaek, G.Hub) were completed to further reduce emissions. To account for the additional power demand from the introduction of electric vehicles and heaters, SK Gas plans to procure renewable energy through the first Power Purchase Agreements (PPAs) in 2027 and the second Power Purchase Agreements (PPAs) in 2030 to achieve Net Zero.
2. Employee Participation in Greenhouse Gas Reduction - Haenggarae
SK Gas encourages employees to practice greenhouse gas reduction in their daily lives using the mobile app 'Haenggarae'. Through actions like using stairs instead of elevators, walking short distances, reducing food waste, and using tumblers, employees collectively reduced approximately 86 tons of greenhouse gases in 2023.
Reduction Achievements and Goals
Greenhouse Gas Emissions
| Category | Unit | 2020 Performance | 2021 Performance | 2022 Performance | 2023 Performance |
|---|---|---|---|---|---|
| Total Emissions (Scope 1, 2) | tCO2eq | 34,092 | 35,478 | 32,383 | 30,794 |
| Direct Emissions (Scope 1) | tCO2eq | 23,992 | 23,481 | 23,817 | 23,450 |
| Indirect Emissions (Scope 2) | tCO2eq | 10,100 | 11,997 | 8,566 | 7,344 |
| Other Indirect Emissions (Scope 3)* | tCO2eq | - | 11,601,210 | 11,942,582** | 11,782,399 |
| Greenhouse Gas Intensity | tCO2eq/KRW billion | 7.73 | 5.46 | 4.01 | 4.40 |
| Reduction Performance (Average Intensity Improvement Rate) | % | N/A | N/A | 26.56 | -9.83 |
- * Scope 3 calculation range: Categories 1-15, with third-party verification for Categories 1, 10, and 11 (98.9% of total Scope 3 emissions in 2023)
- ** 2022 Scope 3 data corrected due to an error in data aggregation for some items
Greenhouse Gas Reduction Performance and Goals
(Unit: tCO2eq)
| Indicator | Description | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|---|---|
| Greenhouse Gas Emissions (Scope 1 + Scope 2) | Target Emissions | (Baseline Year) | 32,409 | 31,747 | 27,622 | 10,691 | 9,600 |
| Actual Emissions | 35,478 | 32,383 | 30,794 | - | - | - | |
| Target Achievement | - | Achieved | Achieved | - | - | - | |
| Energy Use Reduction | Seawater Heat Exchanger (For Ships) | 376 | 381 | 390 | 293 | 195 | 195 |
| Seawater Heat Exchanger (Large Capacity) | - | - | - | 3,773 | 9,401 | 9,483 | |
| Eco-friendly Vehicle Conversion | - | - | - | - | 25 | 35 | |
| Introduction of Central Heating and Cooling System | - | - | 27 | 27 | 27 | 27 | |
| Expansion of Renewable Energy Use | Solar Power | 13 | 27 | 35 | 40 | 40 | 40 |
| REC Purchase | - | 2,537 | 3,984 | 8,915 | 8,915 | 8,915 | |
| Power Purchase Agreements (PPAs) | - | - | - | - | - | - | |
| Product/Service Greenhouse Gas Reduction | B-C Oil to LPG Fuel Conversion | 144 | 148 | 145 | 145 | 146 | 147 |
| Distance Reduction of Diesel Transport by Wego | - | 11 | 23 | 25 | 28 | 31 | |
| Employee Participation in GHG Reduction (Haenggarae) | 8 | 12 | 86 | 90 | 100 | 110 | |
Biodiversity
Biodiversity Policy
SK Gas recognizes the importance of sustainability management of natural resources and raw materials, maintaining natural ecosystems, and conserving biodiversity. We strive to prevent factors and elements that threaten these aspects and work to restore or replace affected areas when damage occurs.
Currently, SK Gas's storage terminals in Ulsan and Pyeongtaek are not located in environmental protection zones as defined by international agreements or domestic laws. Additionally, an environmental impact assessment is mandatory for new projects, and environmental protection zones are excluded from site selection for new projects.
Protection Strategies and Activities
SK Gas conducts preliminary environmental impact assessments according to relevant laws when constructing new business sites. This helps identify and prevent factors threatening land contamination and biodiversity. Furthermore, we actively gather feedback from local residents through public hearings.
We collaborate with local environmental organizations in Seongnam, Ulsan, and Pyeongtaek, as well as the National Institute of Ecology, and support ecosystem protection activities through the SE Bridge project, which backs social enterprises. Additionally, SK Gas is a member of the Biz N Biodiversity Platform (BNBP), a corporate biodiversity conservation initiative.
Ecosystem Conservation Activities
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SK Happy Forest Garden
In Pyeongtaek, SK Gas has created garden and rest areas to expand recreational spaces for citizens and protect the ecosystem by using trees that reduce fine dust.
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One Company, One Coastline Protection Activities
This initiative involves local organizations and companies voluntarily preserving the marine environment by maintaining ports, beaches, and estuaries.
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ECO-SKOOL Ulsan
To raise public awareness about Ulsan's ecosystem, SK Gas collaborates with the social enterprise and female-owned company ‘EcoPlay’ to develop and educate ecological content. The ‘ECO-SKOOL Ulsan’ project produces AR workbooks and educational materials to inform about Ulsan's ecological environment and marine life.
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Wildfire Restoration Project
In 2023, SK Gas supported the wildfire recovery project in Hongseong, South Chungcheong Province, run by the social enterprise ‘WePlant.’ WePlant developed the ‘TreeMap’ service to measure and disclose the quantitative outcomes and economic value of forest restoration projects.
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Endangered Insect Protection Project
To highlight the ecological importance of insects, SK Gas supports the social enterprise ‘Little Friends in the Forest’ and runs a project to breed and release endangered insects, primarily in the Ulsan area where its business sites are located.
Protection Achievements and Goals
SK Gas conducts programs to explore and monitor endangered species around its Ulsan site and collaborates with the local community to protect the ecosystem. In 2020, SK Gas published the book "Meet the Nature of Ulsan" to raise awareness and protect the ecological environment of the Taehwagang River in Ulsan. In 2021, the book "Meet the Nature of Pyeongtaek" was published to highlight Pyeongtaek's ecological environment. In 2022, SK Gas published and distributed 20,000 copies of books covering the ecological environments of Seongnam and Seocheon, where the National Institute of Ecology is located.
SK Gas will continue to contribute to ecosystem protection through direct and indirect means by establishing long-term biodiversity-related goals.
| Category | 2021 | 2022 | 2023 | 2024 and Beyond (Mid-term Plan) |
|---|---|---|---|---|
| Number of SE Bridge Partner Companies | 1 (EcoPlay) | 1 (WePlant) | 1 (Little Friends in the Forest) | Collaboration with one new company each year |
| Local Ecological Survey and Publication/Distribution of Ecological Books | Pyeongtaek | Seongnam/Seocheon | New projects under discussion (Plans to promote wetland protection activities in cooperation with the National Institute of Ecology) | |
| Number of Participants in Ecological Protection Programs with Local NGOs | 75 | 240 | Focus on Ulsan/Pyeongtaek areas | |
| Afforestation and Urban Park Projects | 744 trees | 870 trees | 1,594 trees | Over 1,000 trees/year through projects like SK Happy Forest Garden and Eco-tree |
| One Company, One Coastline Protection Activities | Ulsan/Pyeongtaek | Ulsan/Pyeongtaek | Ulsan/Pyeongtaek | Conducted annually around business sites |
Meet the Nature of Ulsan
Meet the Nature of Pyeongtaek
Friends of Nature in Seongnam
Friends of Nature in Seocheon Yubudo