Members of Solutions for Our Climate protest against POSCO, accusing the steelmaker of greenwashing its products, in front of POSCO's headquarters in Seoul, Monday. Courtesy of SFOC

A Korean environmental advocacy group accused POSCO of labeling its steel products as "eco-friendly" while manufacturing processes proved otherwise, according to the activists, Monday.

POSCO, meanwhile, said the labeling was approved by the country's govermment agency and its carbon emission-reduction footprints have also been recognized by a global third-party certifier.

Solutions for Our Climate (SFOC) on the same day filed the claim against the company's "carbon-neutral" Greenate brand through the Fair Trade Commission and the Ministry of Environment. The campaigners accused the brand of exaggerating the sustainability of its products and detracting attention from its continued use of coal-fired blast furnaces without concrete phase-out plans.

While the country's biggest steelmaker promoted Greenate to investors and customers, it also invested over 519 billion won ($400 million) in extending the lifespans of two blast furnaces at its Pohang and Gwangyang steel plants, according to the campaigners.

"The two blast furnaces emit over 17 million tons of CO2-equivalent per year and contributed to health issues that cost approximately $2.95 billion in 2021," said an official from the group. "Relining blast furnaces extends the use of coal in steel production and adds 15 to 20 years to the facilities' operational lifespan."

The group compared the company to Japan's Nippon Steel, which launched a carbon-neutral brand in 2022 in the same month that it also announced a plan to build two blast furnaces in India that would emit up to 12 million tons of carbon.

"Although we recognize that POSCO is taking gradual steps to decarbonize its steel production, it is misleading to launch and promote a carbon-neutral brand while actively prolonging its coal use and using questionable methods to label its products as low-carbon," said Heather Lee who leads SFOC's Steel Team.

The company, however, rebutted that steel products under the brand have been qualified by Korea Environmental Industry and Technology Institute (KEITI) under the country's environment ministry as carbon-neutral.

"They checked the reduced amount of emissions, how we measure the reduction as well as other environmental standards we use before approving us to strategically promote Greenate," said an official from the company.

POSCO's steel mill in Pohang, North Gyeongsang Province / Korea Times file

POSCO's low-carbon products under the Greenate Value Chain, according to SFOC, focus on avoided emissions. The brand posits that its steel products are more durable than others and thereby reduce the potential amount of the products used. The campaigners said the brand's initiative, however, does not offset the need for companies to reduce their emissions.

Not having clear standards also leaves room for POSCO to overestimate the amount of avoided emissions and greenwash its products while continuing with business as usual, the group said.

The fact that POSCO uses a mass-balance methodology to certify its Greenate-certified steel as a low-carbon product is also controversial, according to the group, because the approach allows the company to unevenly allocate amounts of neutralized emissions to specific steel products.

"POSCO recently certified 590,000 tons of carbon dioxide it claimed it reduced between January and August last year," Lee said. "Our calculation has found that the reduction translates to less than 1 percent of its overall emissions. However, the certification practice allowed the company to sell up to 300,000 tons of its so-called low-carbon steel. Without clear standards, the approach could allow POSCO to overstate the climate impact of its measures."

However, the POSCO official said DNV, a quality assurance service based in Norway, certified the amount of carbon emission reduction after conducting an on-site inspection last year of how the steelmaker measured the lowered discharge.

"Since the outside accreditation body's certification, we have been trying to explain to the public our green transition measures with clarity using precise terminology," said the official.

SFOC said LG Electronics first bought POSCO's Greenate-certified steel for its laundry dryer components, and Samsung Electronics is now considering a purchase for production of its premium oven products.

The campaigner's claim comes amid growing calls for global steelmakers to transition to net zero. The group said around 70 percent of steel produced worldwide is made with coal-fired blast furnaces, and over 70 percent of existing coal-fired blast furnaces will face a decision by the end of 2030 of whether to reline or transition.