Korea’s POSCO major forestation project in Uruguay has been accredited by the United Nations as helping offset the steel-maker's huge carbon footprint. The Korean steel-maker registered the CDM (Clean Development Mechanism) business with the UN Framework Convention on Climate Change (UNFCC) to earn carbon credits through its afforestation project in Uruguay.
POSCO is the first Korean company to register afforestation carbon credit, 18th globally, and the first amongst steelmakers, according to a company release.
During the December 2008 Board of Directors Meeting, POSCO decided to invest 55 million USD in Uruguay to purchase 20,000ha of afforestation land to carry out the carbon credit project, to secure carbon credit while at the same time improving the company’s environment friendly image. For this project, POSCO Uruguay was established in February of 2009.
POSCO Uruguay first purchased approximately 1000ha of land in August last year in Cerro Largo and planted approximately 880,000 Eucalyptus trees up to date as sample planting to check feasibility.
Prior to the UN CDM project registration, POSCO hosted a public hearing for stakeholders in Montevideo. After receiving the Uruguayan government approval this year, POSCO registered for the carbon credit project to the UNFCC.
POSCO describes test planting results in Uruguay afforestation environment as excellent compared to other countries. There are approximately 4 million hectares of afforestation encouragement land, while many afforestation specialized companies exist. Also, trees grew more than 2.5m after one year, showing excellent tree growth, and corporate and property taxes are exempted for afforestation companies.
With the excellent feasibility of afforestation in Uruguay and by registering carbon credit to the UN, POSCO is planning to purchase an additional 19,000ha of land by 2013, expanding the total scale to 20,000ha.
This means the afforestation land equivalent to approximately one-third of the Korean capital Seoul will be secured, reducing 200,000 tons of carbon-dioxide per year.
Afforestation carbon credit projects are referred to as A/R (Afforestation/Reforestation) CD, which includes new afforestation or reforestation. POSCO has been actively promoting afforestation carbon credit projects as with the enactment of the Kyoto Protocol, 2005, Korea is also expected to mandatory reduction of greenhouse gases starting in 2013.
According to POSCO conditions are very strict in Uruguay as permission for afforestation carbon credit projects are awarded only for regions that are not forests since 1990 followed by investigation by a UN assigned institution. The first afforestation project globally was secured in China`s Guang Xi Province in 2006, followed by 10 others in 2009, and 7 in 2010 including POSCO, growing in activities.
The Pohang Iron and Steel Company is based in Pohang, South Korea and is the world's second largest steel maker by market value and Asia’s most profitable steelmaker. Currently, POSCO operates two steel mills in Korea, one in Pohang and the other in Gwangyang. In addition, POSCO operates a joint venture with US Steel, USS-POSCO, which is located in Pittsburg, California.
With the strong Korean shipbuilding and automobile industry dependent on POSCO for steel, it has been seen as the bedrock of Korea's industrial development over the past 40 years. POSCO slogan is Resources are limited; Creativity is unlimited.