November 21, 2011

Country Report(KOREA)

2011 SEAISI Environmental & Safety Seminar

Environmental Policy Developments

1. Reinforcement of HAPs regulation

HAPs inventory survey study is conducted for iron & steel industry (June, 2011)

Compulsory installation BAT regulation will be applied

Draft version for facility management standard of HAPs has been released (October, 2011)

☞ Government benchmarked the BAT regulation of advanced countries (e.g. EU IPPC)

* HAPs: Hazardous Air Pollutants

☞ HAPs emitting facility management standards are under discussion

It includes monitoring and control of non-point source pollution from yard to steel making process.

Process Draft of facility management standards

Raw materialStock Yard

- Fugitive emission control measures must be installed (Covering BC, Spray gun, windbreak net etc)- Monthly monitoring & reporting of TSP at the boundary of steel works (Ensure less than 0.5mg/m3)

Sinter Blast Furnace

- Dust collection system must be installed (Storage bins, Crushers, Coolers, Blast furnace, Cupola, Topedo ladle car etc)

Coke- Quarterly monitoring & reporting of opacity (Ensure less than 20% opacity)- Flame detector at the ascension pipe must be installed

Steel makingEAF

- Building are must be enclosed during the operation (Except for transportation & safety reasons)- Quarterly monitoring & reporting of opacity (Opacity: steel making-20%, EAF-10%)- Dog house syetem must be installed for EAF

※ Draft version for facility management standard of HAPs

[Issues]

☞ If dolomite is designated as possible asbestos containing material, steel industry should face strong voices from NGOs for using dolomite for exposing to workers and vicinity communities

☞ No countries regulate on asbestos for the natural state of rocks such as limestone and dolomite

2. Asbestos regulation for usage of potential asbestos containing minerals (e.g. serpentine)

The accusation of asbestos for using serpentine was cleared by the Korean prosecutor’s office

Government plans to implement “Act of safe management using potential asbestos containing minerals”

Details of regulations such as transportation & usage and mineral lists will be released by the end of

this year

Korea has banned the manufacture, import and use of products with asbestos concentration exceeding 0.1 % since 2009. And legal guideline on the use of 12 minerals will enter into force April next year.

☞ Candidate of ACM is 12 minerals, including serpentine, olivine, dolomite, etc.

Environmental Policy Developments

3. Progress of mercury regulations

It is part of comprehensive plan of korean government for global mercury treaty.

Development of management systems for raw material mercury, mercury recovery and storages.

☞ Study on mercury content for formulating unintentional mercury emission.

Tightening of standards for mercury emission facilities(air, water, waste)

☞ Set the national reduction goal of atmospheric mercury compounds emissions

☞ Evaluate the current mercury emissions to water from source facilities.

☞ Development of appropriate waste treatment standard based upon graded approach to mercury content limitation. (*Korean government set the regulation on waste with mercury levels above 0.005 mg/L from leaching test )

Strengthen mercury management infrastructure for global mercury treaty.

☞ Building mercury emission inventory on preparation for the report of country implementation by treaty (~`15)

Environmental Policy Developments

1. GHG & Energy Target Management

Announced sector based CO2 reduction target for 2020

Submitted the verified statement of GHG emission and energy usage from 2007 to 2010: June

Reduction target for Iron & Steel Sector is 6.5% compare to BAU by 2020 (National total: 30%, Industry Total: 18.2%)

- Corporation criteria(~2011): GHG ≥ 125,000 CO2 ton/year, Energy ≥ 500 TJ/year

Korea sets drastic emission cut goal and companies must submit detailed action plans by December. - POSCO needs to cut emission levels by 963,000 ton of CO2 in 2012 based on BAU

[Issues]

☞ Concerns that Korea is pushing forward a policy that is not being pursued by advanced industrialized economies such as the United States

Climate Change Policy Developments

- It aims to reduce GHS emissions reduction of 30% from BAU(business-as-usual) by 2020

- POSCO’ target represents 20.6 percent of cuts that need to be made for the entire industrial sector

Different view on reduction potentails between government and industry

- The Korean government will revisit the issue in 2014

2. Emission Trading Scheme (ETS)

The bill of ETS was submitted to National Assembly in April 2011

Special Committee for ETS has establised in July 2011

The implementation of carbon emission trading in 2015 is now under consideration by the government after strong opposition from industry to the government's initial plan to start in 2013

Climate Change Policy Developments

The bill is under discussion for passage at the National Assembly

※ Details of ETS

Items Original Scheme (‘10.11.17) Proposals of Industry Submmitted Scheme(’11.4.19)

Starts 2013~ 2015~ 2015~

Auction1st Phase < 10%2020~ : 100%

0% (100% free allocation) 1st phase < 5%

PenaltyMax 625 euro/t-CO2

Less than 5 times of CO2 priceMax 12 euro/t-CO2

Less than 3 times of CO2 priceNo limitation

Less than 3 times of CO2 price

Double Burden 1) - Against double burden Exemption 2)

Ex-post no yes Partially yes 3)

1) Korean Government already implemented the GHGs & energy target management scheme from 20122) The companies under ETS are subject to being exempted from the GHG & Energy Target Management Scheme.

However, general expectations are, target management scheme may transfer to ETS in 20153) In the case of big economy changes