Korea launches the "One Team" model as a response to CBAM
The Korean Ministry of Trade, Industry and Energy (MOTIE) announced on May 19, 2026 the launch of the "2026 Industrial Supply Chain Carbon Partnership Project" – an ambitious attempt to address Scope 3 emissions across Korea's key export sectors.
The government is investing 9.8 billion won (≈ 7 million USD) and covering 50–60 % of the costs for carbon‑reduction technologies for SME suppliers.
Eight consortia and 31 SME partners, including Hyundai/Kia, Samsung, LG, POSCO, etc., aim to save ~20,000 t CO₂e per year through four types of support models:
1. Chain support model (Hyundai/Kia) – money to Tier 1 → they pass it on to Tier 2
2. Synergy connection model (Samsung, LG, SK Hynix, HL Mando) – sharing common suppliers → the effect multiplies across the sector
3. Performance utilization expansion (HD Korea Shipbuilding) – surplus reductions are converted into external carbon projects
4. Downstream support model (POSCO) – steel helps its customers (automotive, construction)
Specific SME technologies: high‑efficiency air compressors, photovoltaics, energy‑efficient heat treatment, semiconductor manufacturing optimization. Plus Product Carbon Footprint (PCF) consulting = SMEs will be able to provide compliance data to their anchor firms.
The goal of this activity is explicitly export-oriented – MOTIE names the specific regulations it is preparing for:
- EU CBAM (steel, aluminium, cement) – POSCO is a Top 5 global steel exporter to the EU
- EU Battery Regulation (Samsung SDI, LG Energy Solution, SK On = Top 3 global suppliers of EV batteries for EU automotive)
- Stricter supply chain due diligence requirements (CSDDD)
- IMO regulations for shipbuilding (HD Korea = #1 global shipbuilder by value)
What to take away?
1. Korea does the opposite of what Trump does. While the US SEC is rolling back climate disclosure, Korea directly funds Scope 3 reduction for SMEs. It deliberately prepares export sectors for the European regulatory framework because the EU is a key market for Korea (automotive, batteries, steel, electronics).
2. CBAM as a “global de facto carbon tax”. The Korean response is further evidence that the EU CBAM acts as a regulatory magnet – it forces Asia to adopt carbon accounting even without its own carbon price.
3. The supplier capability gap is a universal problem. Koreans are tackling the same issue that VW, Volvo, BMW, ASML, BASF face: Tier 1 suppliers have compliance, Tier 2/3 SMEs do not. Without a stream of subsidies for SME compliance, Scope 3 reporting will not move forward. Australia this week is proposing “boundaries on supplier information requests” – Korea is doing the opposite and funding supplier readiness.
4. Inspiration for the Czech Republic – Czech industry faces a similar problem: companies must report Scope 3 for their EU clients, but SME suppliers lack the capacity. A similar programme, for example through the National Recovery Plan, could be highly cost‑effective.
5. POSCO "downstream model" is a model for European steelmakers. ArcelorMittal, Salzgitter, Voestalpine could (and should) do the same, i.e., help automotive/construction clients transition to green steel.
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