HD Hyundai forms S.Korea's first integrated carbon footprint team in shipbuilding

South Korea's HD Hyundai Co. has teamed up with domestic shipbuilders and classification societies to form the first integrated "carbon footprint" team in the domestic shipbuilding industry.

A carbon footprint is the combined volume of greenhouse gases generated in the production and consumption of products by individuals, companies or countries.

HD Hyundai on Friday said it signed on the day before a contract on a joint project to standardize calculation of Scope 3 CO2 emissions with its shipbuilding affiliates Korea Shipbuilding & Offshore Engineering (KSOE), Hyundai Heavy Industries Co., Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries, major domestic shipbuilders Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries, and maritime classification societies American Bureau of Shipping (ABS) and Korean Register.

Under this agreement, each company will standardize the calculation method by sharing that for Scope 3 CO2 emissions and prepare global guidelines by year's end. Scope 3 is a concept that covers such emissions that come from operations after delivery of ships excluding the vessel production process.

Participating organizations will release the resulting guidelines and receive opinions from stakeholders. In addition, the scope of engagement will be expanded to global shipbuilders and groups such as the International Maritime Organization for the standards to gain global recognition and acceptance.

The Corporate Sustainability Reporting Directive of the European Union and International Sustainability Standards Board recently required disclosure of Scope 3 emissions, and South Korea's shipbuilders are jointly responding to this measure.

Last year, KSOE in a first for South Korea's shipbuilding industry calculated and released its Scope 3 emissions.

Market demand related to calculation of Scope 3 emissions is growing but no standardized methodology yet exists, said Darren Leskoski, CEO of ABS Far East Asia who attended the signing ceremony. He also hailed the joint efforts of shipbuilders and classification societies to set new global standards.

Write to Jae-Fu Kim at hu@hankyung.com