Carbon report 2012 - main | POSCO · report FeatureS Highlights from Carbon Report 2012 Since the first POSCO Environmental Report was released in 1995, we have regularly disclosed

Carbon report

toward a Green economy

2012

toward a Green economy

ContentS

Separate icons are used to indicate the content of this Report and additional related information. Related page Webpage

<CARBON REPORT 2012> POSCO recognizes the global environmental issues stemming from climate change and has been imple-menting responses to mitigate the problem. The 2012 Carbon Report analyzes the degree of interest by stakeholders in POSCO’s carbon management program and presents climate change response strategies as well as the results of it efforts to reduce greenhouse gas emis-sions. It is our hope that readers will use the information herein as a reference in their own decision making.

01 report FeatureS

02 Ceo MeSSaGe

04 exeCutive SuMMary

05 intro

06 introduCtion

07 Corporation overvieW

08 Carbon riSk & opportunity ManaGeMent

09 GovernanCe

11 viSion ∙ StrateGy ∙ tarGet

13 perForManCe

14 poSCo Carbon FloW

16 Green Steel

17 enerGy eFFiCienCy iMproveMent

20 Co2 breakthrouGh teChnoloGy developMent

23 Carbon ManaGeMent SySteM

24 enerGy-eFFiCienCy Steel

27 Green buSineSS

28 eCo-Friendly SlaG CeMent

29 Carbon Market

30 reneWable enerGy developMent With poSCo FaMily

33 Green liFe

34 Green CoMMunity

36 Green WorkplaCe

38 Green partnerShip

39 doMeStiC & ForeiGn Cooperation

42 Carbon dialoGue

44 poSCo FaMily

45 poSCo SpeCialty Steel

46 poSCo enerGy

47 poSCo C&C

48 poSCo CheMteCh

49 SnnC

50 poSCo aSt

51 poSCo planteC

52 poSteCh

53 poSCo e&C

54 poS-hiMetal

55 independent aSSuranCe report

56 index

Carbon report 2013

naviGation Menu

Separate icons are used indicate the contents of this Report and additional related information.

Related page Webpage

report FeatureS

Ceo MeSSaGe

exeCutive SuMMary

IntroCorporation overvieW

Carbon riSk & opportunity ManaGeMent

GovernanCe

viSion ∙ StrateGy ∙ tarGet

perForManCe

poSCo Carbon FloW

Green SteelenerGy eFFiCienCy iMproveMent

Co2 breakthrouGh teChnoloGy developMent

Carbon ManaGeMent SySteM

enerGy-eFFiCienCy Steel

Green BuSIneSS eCo-Friendly SlaG CeMent

Carbon Market

reneWable enerGy developMent With poSCo FaMily

Green lIfeGreen CoMMunity

Green WorkplaCe

Green PartnerShIPdoMeStiC & ForeiGn Cooperation

Carbon dialoGue

PoSCo famIlypoSCo SpeCialty Steel

poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal

independent aSSuranCe report

index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

report FeatureS

Highlights from Carbon Report 2012Since the first POSCO Environmental Report was released in 1995, we have regularly disclosed information on our corporate environmental efforts. Starting in 2003, our annual Environmental Report has been integrated into our Sustainability Report. Actions by the company to mitigate climate change were firstly recorded in the 1999 Environmental Report, and coverage of this topic has continued in the Sustainability Report. In 2010, we published Carbon Report 2009, which was the first carbon report to be verified by a third party in the steelmaking industry. In Carbon Report 2012, the CEO reaffirms POSCO’s commitment to carbon management and implementation strategies aligned with our corporate vision. The Report also includes an improved POSCO Carbon Flow to help stakeholders understand POSCO’s carbon footprint more easily. POSCO’s innovative technology such as PS-BOP (POSCO Basic Oxygen Process) was included; the POSCO Green Building that employs state-of-the-art eco-friendly key technology and the slag sea forest built in the coastal waters of Yeosu Expo are also introduced. Also featured is the Carbon Dialogue which summarizes the discussion at a colloquium of carbon experts, while the number of POSCO Family companies to participate in climate change mitigation activities was expanded from eight to ten.

Professional Review & Third-party Verification of DataThe data and other contents in the Carbon Report 2012 were reviewed by experts from POSCO and from the POSCO Research Institute. Moreover, Samil Pricewaterhouse Coopers, an independent external organization provided assur-ance on the contents of this report and on the amount of GHG (greenhouse gas) emissions at our steelworks, thereby enhancing the integrity of the data.

Reporting Framework Carbon Report 2012 was compiled according to the G3.1 Guidelines of the Global Reporting Initiative (GRI), CCRF (Climate Change Reporting Framework) 1.0, and POSCO Carbon Reporting Procedures. The financial data contained herein were determined on the basis of Korea’s corporate accounting standards. The amounts of GHG emissions at the Pohang and Gwangyang Works were measured using the POSCO GHG Accounting Guidelines, which were developed after referring to the IPCC Guidelines for National Greenhouse Gas Inventories, WBCSD/WRI Greenhouse Gas Protocol and World Steel Association Guidelines.

Coverage PeriodCarbon Report 2012 covers the period from January 1 and December 31, 2012. The Report also includes figures from previous years to help readers understand POSCO’s performance over the past years.

Report Scope Carbon Report 2012 details the climate change response programs and their respective results at the Pohang Works, Gwangyang Works, Pohang Head Office and Seoul Office. Also covered are actions taken to address the issue of climate change by ten companies and institutions in which POSCO invested.

Report Distribution and Feedback This Report has been published in Korean and English language versions, and it can be downloaded from the POSCO website. Stakeholders are invited to send their feedback by mail, email or telephone.

For detailed information, please visit the POSCO homepage (http://www.posco.com).

01

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

To Our Stakeholders, with prolonged recession due to a slowing economy after the global financial crisis, we have entered a period of low growth and low profits, and competition has grown more intense with over-supply of goods. The steelmaking industry was likely affected, which led to lower price of steel products. POSCO’s sales decreased by 9% compared to the previous year, at KRW 35.7 trillion.

Despite an unfavorable business environment, the year 2012 was a busy year in the climate change arena. In the international scene, it was decided that the GCF (Green Climate Fund) that assists developing countries in adaptation and mitigation practices to counter climate change is to set up its base in Songdo, Incheon. At the 18th session of the Conference of the Parties to the UNFCCC held in December in Doha, Qatar, the Kyoto Protocol was extended until 2020; countries agreed to submit their positions on the principles for the post-2020 agreement, legal modalities, and mitigation methods by 2013; and a draft agreement is to be prepared by 2015. Domestically, an ordinance for emission trading scheme was passed at the National Assembly in May that will be the legal foundation for the full-scale implementation of emission trading scheme from 2015. These international and domestic changes provided an opportunity for corporations to recognize the importance and necessity of carbon management and to come up with a response strategy.

Ceo MeSSaGe

this year many climate change issues emerged, while business conditions worsened as it entered aperiod of low growth and low profits.

02

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

POSCO declared the POSCO Low-carbon, Green Growth Vision and announced a voluntary reduction goal in February 2010. The plan calls for us to reduce our CO2 emission intensity by 9 percent from the average emission level reported in the past three years (2007-2009) by the year 2020. Our enterprise-wide energy saving activities and related investment made during the recent three years achieved some 6.9 percent reduction in emission intensity. This is the result of continued process improvements to reduce coal usage, using byproduct gases, and actively pursuing independent innovative technologies such as PS-BOP and hydrogen steelmaking. We have strengthened the sales of strategic steel products such as energy-efficient high-strength steel sheet for vehicles, high-grade electrical steel plate and thick plate steel.

Companies in which we invested chose their respective areas of specialization, and the green business projects undertaken jointly are beginning to show tangible results. POSCO Energy installed 100kW fuel cells for buildings at the Seoul Seobuk Hospital and Seoul Children’s Grand Park. The sea forest built at the coastal waters of Yeosu Expo using slag, a byproduct from steelmaking, showed high coverage rate of marine algae and species diversity.

Since its launch in 2011, the Green Walk campaign which aims to bring employees and their family members together to adopt a greener lifestyle was carried on into 2012. The campaign was expanded to outsourcing partners and suppliers, and with their voluntary participation some 9,081 families are taking part in the campaign. In 2012, POSCO was selected as the leading corporate group at the Carbon Disclosure Project again after 2010, and continues to actively participate in domestic and international climate change related efforts.

With the domestic emission trading scheme to be started in 2015, we expect that greenhouse gas regulations will become more robust and that costs to meet such regulations will increase rapidly. We will integrate the steel, materials and energy businesses at the POSCO Family level, maximizing synergy between low-carbon steelmaking and new & renewable energy. We will develop emission reduction technology for each process and build a strategic decision-making model that is cost effective in the aspect of carbon management in order to establish an efficient greenhouse gas management system.

We now present our fourth Carbon Report to introduce POSCO top management’s vision for green growth and POSCO Family’s challenges and efforts to accomplish that vision. I sincerely hope for stakeholders’ continued encouragement and support.

our Co2 emission intensity has gone down by about 6.9% over the recent three years.

poSCo will establish a green-house gas management sys-tem to effectively prepare for the domestic emission trading Scheme.

April 2013 Chairman, POSCO

JOON-YANG CHUNG

03

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

exeCutive SuMMary

The 4th annual POSCO Carbon Report is issued.

We were the first steelmaker to publish a third-party-verified carbon report in 2010, in order to inform stakeholders that we are aware of the issue of climate change and explain what we are doing to address this issue. In 2013, we publish our fourth Carbon Report.

This document explains the performance of our GHG emission reduction efforts in 2012, three years after we declared our vision for low-carbon green growth.

In February 2010, POSCO announced its vision for low-carbon green growth with a voluntary greenhouse gas reduction target. The goal was to reduce CO2 emissions from the production of each ton of crude steel by 9% by 2020 compared to the average CO2 emission intensity between 2007 and 2009. Our efforts resulted in a 6.9 percent reduction in CO2 intensity in 2012 at 2.03t-CO2/t-s.

2

1

3

4

5

6

7

2020 vISIon

We reduced 3.17 million t-CO2 in society through high-efficiency steel.

POSCO’s high-efficiency steel products such as high-strength steel sheet which improves gas mileage for vehicles, and low core loss electrical steel sheet that improves energy efficiency of motors and transformers help save energy and reduce CO2 emissions, contributing to decreasing socially emitted greenhouse gases.Green

Steel

POSCO participated in domestic GHG reduction projects and a Target Management project, and was certified for reduction of 3.55 million t-CO2 during 5 years.

We participated in the national greenhouse gas reduction project conducted by Korea Energy Management Corporation from 2005 to 2011. For this project we undertook 14 tasks during 5 years including increased power production through efficient energy consumption at the steel works, and reducing greenhouse gases through new & renewable energy business.

Green BuSIneSS

POSCO Family employees and their families participated in the “Green Walk” campaign. A total of 9,081 families took part in the campaign

Since 2011, POSCO Family employees and their family members have been voluntarily participating in the Green Walk campaign which encourages four energy-saving activities (Walk, Turn Off, Reduce, and Recycle). In 2012, the campaign was expanded to include major partner companies and suppliers, and the number of participating families as of the end of 2012 has reached 9,081.

Green lIfe

POSCO was selected as a leading corporate group in the Carbon Disclosure Project

At the Carbon Disclosure Project conducted on the world’s 500 leading companies, POSCO was included in the Carbon Disclosure Leadership Index (CDLI) in 2012 once again after 2010.

Green PartnerShIP

This report contains information on 10 of POSCO Family companies’ efforts to respond to climate change and the results achieved from those efforts.

The Report covers activities of eight companies/institutions which are subject to the Korean government’s GHG & Energy Target Management Scheme – POSCO Specialty Steel, POSCO Energy, POSCO C&C, POSCO Chemtech, SNNC, POSCO AST, POSTECH and POS-HiMetal – as well as POSCO E&C and POSCO Plantec.

PoSCo famIly

04

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Under the GHG & Energy Target Management Scheme, POSCO was required to reduce 960,000 tons of greenhouse gas emission in 2012. To meet this obligation we implemented reduction activities such as investing in energy saving facilities, reducing coal usage through operation improvements and increasing use of steel scrap. As a result of these activities we achieved our given reduction target. In 2013 we will continue our energy saving and GHG reduction activities, actively develop POSCO’s unique technology such as the PS-BOP (POSCO Basic Oxygen Process) and build new facilities in order to meet our reduction obligation of 2.5 million tons.

Group Leader Kim, Jae-won | POSCO Environment & Energy Department

Greatly improved performance in Co2 emission intensity

POSCO continued to reduce coal usage, improve energy efficiency and

develop CO2 reduction technologies to reduce greenhouse gases emitted

during the production process. Each operations team was required to set

emission intensity targets to broaden the participation throughout the

company. Thanks to these efforts we were able to achieve an emission

intensity of 2.03t-CO2/t-s, which is lower than the previous year.

2.03t-CO2/t-s

Intro

Carbon report 2013

naviGation Menu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

The potential impact of climate change on business activities is increasing by the day, as is stakeholders’ interest in the matter. POSCO established an independent materiality assessment process to systematically manage and evaluate major issues that significantly affect our business activities. This process is continuously reviewed and upgraded.

Through the materiality assessment process, 13 issues were identified and prioritized in 2012 and the Carbon Report was prepared focusing on these 13 issues. While the major issues identified in 2012 do not vary greatly from those of the previous year, the ranking shows some changes. In 2012, climate change strategy and carbon management governance have gone up in priority owing to the full-scale implementation of greenhouse gas regimes such as greenhouse gas emissions trading.

The materiality test process and results are as follows.

IMPORTANCe RANkINGS IN 2011 AND 2012

intro

Improve Carbon Report publishing process

External Issues

Refer to global assessment organiza-tions (SAM DJSI and CDP) and global guidelines (GRI 3.1)

Internal Issues

Review POSCO’s mid-/long-term strategy, directive, internal policy and systems

Criterion#1: Stakeholder attentionCriterion#2: Business impact

Review by internal and external experts

Report to/feedback from top management

Verify the Carbon Report through an independent third party

Identify external/internal carbon management issues

Analyze the materiality of issues and prioritize them

Report of performance evaluation Encapsulate the evaluation results

revieW3 publiSh the report4MATeRIAlITY TeST PROCeSS

1 identiFy 2 prioritize

Busi

ness

Impa

ct

High

PRIORITY ASSeSSMeNT MATRIx

Stakeholder Attention High

Performance of carbon management4

Participation incarbon market13

12 Carbon accounting

11 Management risk related to climate change

10 GHG emission reduction efforts through products and byproducts

9 GHG reduction target

8 Carbon management governance

7 New green businesses

5 Activities to reduce GHG emissions at sites

GHG emission reduction efforts of POSCO Family3

2 Cooperation for carbon reduction policy

1 Climate change response strategies

6 Carbon disclosure

Ranking

1

2

3

4

5

6

7

8

9

10

11

12

13 Participation in carbon market

Carbon management governance

GHG emission reduction efforts through products and byproducts

Management risk related to climate change

Carbon accounting

GHG reduction target

Activities to reduce GHG emissions at sites

Climate change response strategies

Carbon disclosure

Performance of carbon management

GHG emission reduction efforts of POSCO Family

New green businesses

Cooperation for carbon reduction policy

Carbon accounting

Participation in carbon market

Management risk related to climate change

GHG emission reduction efforts through products and byproducts

GHG reduction target

Carbon management governance

New green businesses

Carbon disclosure

Activities to reduce GHG emissions at sites

Performance of carbon management

GHG emission reduction efforts of POSCO Family

Cooperation for carbon reduction policy

Climate change response strategies

5↑

1↓

-

-

2↑

1↓

5↓

4↑

1↓

1↓

1↓

3↓

-

2011 2012

Intro > GREEN

STEEL > GREEN BUSIN

ESS > GREEN LIFE > GREEN

PARTNERSHIP

06

2012 CARBON REPORT

Carbon report 2013

naviGation Menu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

POSCO was established in 1968 and currently operates two integrated steelworks in Korea, one at Pohang and the other at Gwangyang. In 2012, the company earned KRW 2.8 trillion in operating income on sales of KRW 35.7 trillion. Crude steel output reached 38 million tons for the year.

Despite business conditions that turned for the worse, we improved profitability by expanding our domestic market share and increasing sales of high value added products. We enhanced technology development and POSCO-style EVI (Expanded Value Initiative for Customers) activities such as developing new products and steelmaking technologies to create new demand. With a view to expanding the domestic market share for home appliances and high-end construction materials as well as dominating the overseas markets, we completed the hot-dip galvanization plant in Pohang, the galvanized sheet steel plants in India and China, and expanded the cold rolled stainless steel plant in Vietnam. Downstream capacities are being expanded or newly added in the new growth markets such as India, Indonesia, Mexico and Vietnam enhance our global competitiveness to further.

We have also increased the contribution of the energy & materials businesses to the Group through optimizing operation of high-efficiency power plants, proceeding with the Miyanmar gas project, strengthening the chemical business using steelmaking byproducts, and continued development of new materials businesses. We focused our competency in the steel, energy and resources businesses. For example, collaboration between POSCO subsidiaries was enhanced to get orders in steel products; we got orders for domestic and overseas energy projects; and expanded the resources development business. We will ensure stable profits by enhancing the value competitiveness of our steel products, global production and global sales, while preparing for future growth by realizing tangible accomplish-ments in the energy business and optimizing the materials business.

Corporate overvieW

2012.2.20 Held the 2012 Green Walk promotion ceremony

2012.2.23 Developed world’s first high-speed lithium extraction technology

2012.3.9 Developed the body frame for electric vehicles

2012.4.30 POSCO Chemtech, POSCO ESM signed MOU with LG Chem for the supply of rechargeable battery material

2012.5.8 POSCO Family Environmental Committee’s Working Group Meeting was held

2012.5.12 Opened the POSCO Pavilion at Yeosu Expo

2012.5.31 Signed a strategic alliance MOU with GE to open new markets in thick plate steel

2012.7.16 POSCO A&C completed the first modular home

2012.9.14 Fourth-year POSCO Carbon-neutral Program launching ceremony was held

2012.10.9 Acquired ISO 50001, the international standard of energy management system

2012.10.17 Held the Global EVI Forum

2012.11.20 Completed construction of the magnesium refining factory in Gangneung

2012.11.23 Held the POSCO Family Environmental Management Committee meeting

2012.12.5 Held side event at the Conference of the Parties to the UNFCC (CoP18, Doha)

ClIMATe CHANGe RelATeD eVeNTS

2012 Ranked 30th in the Davos Forum’s “Global 100 Most Sustainable Corporations”

2010~2012 World Steel Dynamics named POSCO “World’s Most Competitive Steelmaker”

2005~2012 Listed on the Sustainable Asset Management Dow Jones Sustainability Index for 8th straight year

2012 Included in the Carbon Disclosure Leadership Index by the CDP

AWARDS & QUAlIFICATIONS

Intro > GREEN

STEEL > GREEN BUSIN


PARTNERSHIP

07

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Carbon riSk &opportunityManaGeMent

Perspectives & Approaches

Climate change is a megatrend that is changing the paradigm in all corners of society, and global companies are looking to enhance their competitive edge by actively responding to the climate change issue. We recognize that responding to climate change and shifting to a green economy poses both risks and strategic opportunities for our business. We are focusing on establishing a strategy that will minimize the business risks and turn climate change into a positive opportunity.

System & Process

POSCO has built an internal system for identifying, assessing and analyzing the risk and opportunity factors associated with climate change in a timely manner. This climate change management process is closely linked to our enterprise risk management system, and the key climate change risk factors are regularly reported to top management. Information on POSCO’s management performance for such risks and opportunities is disclosed transparently to external stakeholders via the third-party-verified Carbon Report, the Sustainability Report and written answers to inquiries from external organizations.

Major Risks and Opportunities

Risks associated with climate change and the shift to a green economy can be classified into three major categories: physical risks posed by climate change, policy risks resulting from the adoption of tougher carbon regulations at home and abroad and corporate/brand image risks. Recently unusual weather patterns around the globe such as unprecedented rainy seasons, scorching heat and heavy snowfalls have caused much damage. POSCO is also experiencing losses across its business activities caused by direct damage to equipment and facilities as well as interruptions in raw materials, power and water supply, driving up logistics expenses. In a preemptive measure to respond to the physical risks of climate change, POSCO runs storm & flood damage monitoring centers at Pohang and Gwangyang around the clock, and works closely together with related government agencies and private organizations. We also established and are steadily improving an enterprise-wide risk management process and system for systematic risk control at the Group level.

According to the Intergovernmental Panel on Climate Change (IPCC) and other international organizations, climate change is closely related to the greenhouse gases that are byproducts of industrial activities, and a global carbon regulation where all nations participate will be in place by 2020. Toughening carbon regulations at home and abroad is a major policy risk that significantly affects the competitiveness of the energy-intensive steelmaking industry. With the Korean government’s enactment of the Framework Act on Low Carbon, Green Growth in 2010, the Greenhouse Gas Emission and Energy Target Management Scheme came into full swing in 2011. In 2012, the Act on the Allocation and Trading of Greenhouse-Gas Emission Permits was passed at the National Assembly, under which emission rights trading will commence in 2015. In addition, with POSCO Family companies’ entry into foreign markets, we are paying close attention to changing carbon regulations in those countries. We steadily monitor the GHG-related regulations and policies to identify potential risk factors while actively participating in related talks to help with the development of reasonable regulations. The establishment of the policy risk management process helps with the effective response to policy risks and top management’s decision-making, and we are continuing our efforts to reduce GHG emissions both in-and-outside of the company as well as in society by improving energy efficiency and developing innovative low-carbon technologies.

POSCO CARBON RISk & OPPORTUNITY MANAGeMeNT PROCeSS

> Determine risk factors

Pinpoint physical and regulatory risk factors

> Discover opportunity factors

Identify opportunities in carbon market and green businesses

Determine global trends and strengthen risk management

Build the POSCO Carbon Man-agement System (2006)

Build and manage a CO2 inven-tory with a third-party verification of CO2 emissions

Assess the effects of new busi-nesses and processes on CO2 emissions

Manage climate change risks in each area and promote new green growth businesses

Assess the progress of GHG emission reduction activities regularly in each area

Examine the status of response to government regulations and policies regarding climate change

Examine POSCO Family’s status of new green businesses

POSCO Family Green Growth Committee report (biannual)

Three-subcommittee activity reports and discussion (quarterly)

POSCO Family Environmental Management Committee, chaired by CEO (when needed)

1 Risk & Opportunity Identification 2 Carbon

Management System 3 Climate Change Response Activities 4 Check and Review 5 Reports to

Top Management

Intro > GREEN

STEEL > GREEN BUSIN


PARTNERSHIP

08

2012 CARBON REPORT

Carbon report 2013

naviGation Menu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

S Green Steel B Green Business l Green Life P Green Partnership

S B POSCO can lead the market by developing and supplying energy-efficient steel Transportation: Tightened standards on vehicular weight and fuel mileage are driving up demand for high-performance steel. Power generation & renewable energy: Supply essential materials for these industries

S B Demand for steel production is likely to rise because steel is easy to recycle.

B POSCO can participate in green businesses, new & renewable energy, and other new growth areas.

S Corporate competitiveness can be raised by developing breakthrough technologies.

l P Stakeholder awareness can be heightened through positive external assessments and transparent data disclosure.

RISk & OPPORTUNITY FACTORS IN POSCO’S CARBON MANAGeMeNT

S The possibility of increased flooding, heavy snowfall and more severe droughts could adversely affect the outdoor storage of raw materials, make industrial process water more difficult to obtain, and drive up related costs.

S The company faces a cost burden and the risk of weakened competitiveness globally when complying with tighter regulations on domestic carbon emissions.

S B Carbon regulations are likely to become stricter in nations where POSCO operates and sells its products.

S P Enactment of the government’s tougher carbon restrictions will reduce national income and curtail steel output.

S A possibility exists that society will impose greater responsibility on companies that generate the most GHGs.

opportunityriSk

POSCO established a sustainability management system for quick decision making on climate change issues by the shareholders, Board of Directors (BOD) and CEO. Based on the opinions collected by the sustainability management working-level teams, and issue discussions and direction presented by sustainability management committees, POSCO implements sustainability management activities systematically by helping the decision making body set the enterprise-wide vision. Meetings chaired by the CEO to discuss major issues including climate change are: the monthly operations meeting; and the executives’ meeting held either each month or as often as needed.

The Environment & Energy Planning Department under the Corporate Technology Operation Division in the POSCO Head Office is in charge of issues pertaining to climate change, energy, the environment, natural resources, and turning byproducts into resources. The Department sets up environmental management strategies, builds and runs enterprise-wide systems for climate change, carbon & energy management, and comes up with measures to generate profits from using resources and byproducts more effectively. With the operation of integrated steelworks abroad, the Department also establishes a global environmental management system to respond to toughening domestic and international carbon regulations and intensifying competition over fuel sources.

The Pohang and Gwangyang Works have an Energy Department that is in charge of CO2 reduction and energy efficiency improvement as well as an Environment and Health Department that deals with environmental and health issues. These two units cooperate with the Environment & Energy Planning Department in the Head Office to set up and implement plans to customize the enterprise-wide systems for environmental and energy management to fit the reality of the Pohang and Gwangyang Works.

POSCO holds the POSCO Family Green Growth Committee and Environmental Management Committee meetings chaired by the CEO. The Green Growth Committee was launched in 2009 to strengthen the foundation for POSCO and POSCO Family’s low-carbon, green growth, while the

GovernanCe

ORGANIZATIONS FOR ClIMATe CHANGe ReSPONSe

CEO

Resources ByproductsEnergy EnvironmentPOSCO Family Environmental Management Committee

Corporate Technology Operation Division

Environment & Energy Planning Department

Climate change

Pohang Works Gwangyang Works

HealthEnergy Environment

POSCO Family Green Growth Committee

Climate Change and Energy Subcommittee

Green Business Subcommittee(Integrated with POSCO Family Green Growth Committee)

Carbon-lean Steel Technology Subcommittee

CO2 emission reduction

Intro > GREEN

STEEL > GREEN BUSIN


PARTNERSHIP

09

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Environment & Energy Committee chaired by the Environment & Energy Planning Department chief was upgraded and re-launched as the POSCO Family Environmental Management Committee chaired by the CEO, where POSCO branches around the globe as well as POSCO Family companies attend.

POSCO Family Green Growth Committee

POSCO launched the POSCO Family Green Growth Committee on July 7, 2009 in a bid to strengthen climate change response strategies and commitment to low-carbon, green growth POSCO-wide. The Committee consists of three subcommittees, respectively tasked with developing carbon-lean steel technology, responding to climate change and energy issues, and seeking new green business opportunities.

POSCO Family Global environmental Management Declaration and POSCO Family environmental Management Committee

As POSCO’s business expands, a Family-level environmental management and environmental risk management system has become more important. POSCO, POSCO-invested companies and outsourcing partners declared the POSCO Family Global Environmental Management Directives in December, 2010 to build a Family-wide integrated environmental management system. Based on three main strategies – “building an integrated environmental management system,” “managing environmental risks,” and “promoting open communications” – POSCO Family is establishing a Family-level environmental management system and pursuing diverse initiatives to steadily improve the environment-friendliness of our business, reduce the discharge of pollutants, lead the low-carbon, green growth movement, and disclose our environmental management performance.

In November 2012, The POSCO Family Environmental Management Committee convened to look back on the achievements during the two years since the POSCO Family Global Environmental Management Declaration and discuss future plans, with the participation of the CEO, Family companies, outsourcing partners and suppliers. During the past two years, we expanded environmental management to all Family companies and upgraded its level, which led to 28 invested-companies and outsourcing partners acquiring ISO 14001 certification. We also implemented the Green-PCP certification program for outsourcing partners and suppliers. In October 2012, POSCO’s Pohang and Gwangyang Works acquired the ISO 50001 certification for the first time in the Korean steelmaking industry. POSCO’s environmental management is currently being upgraded to version 3.0. We will continue our efforts to transform ourselves to fit the green economy paradigm. These efforts include developing the new POEMS (POSCO Environmental Management System) which will enable us to expand environmental governance to our global business operations such as the integrated steelworks in Indonesia, and introducing carbon accounting, which applies monetary assessments to our activities related to GHG emission and reduction.

The POSCO Family recognizes the environment as a key factor in management strategies and secures environmen-tal soundness by developing new technologies and engaging in regular communication with stakeholders, therefore contributing to low-carbon, green growth. To this end, members of the POSCO Family must observe the following directions:

> Build a Family-wide environmental management system based on ISO 14001 and secure global leadership

> Comply with environmental regulations and continue to improve all processes in consideration of the environment

> Minimize the discharge of contaminants by adopting cleaner production methods and implementing the best available control technologies.

> Capitalize on natural resources and byproducts efficiently to establish a resource-circulating society and improve ecological efficiency.

> Lead low carbon green growth by using cleaner energy sources and implementing green technologies.

> Disclose environmental management performance to secure management transparency and sustainability.

POSCO FAMIlY eNVIRONMeNTAl POlICY

(Revised in Dec. 2010)

Intro > GREEN

STEEL > GREEN BUSIN


PARTNERSHIP

10

2012 CARBON REPORT

Carbon report 2013

naviGation Menu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

POSCO has established Vision 2020, which sets the goal of achieving KRW 200 trillion in sales and ranking among the world’1 top 100 companies through material, energy and new seed businesses founded upon the existing steel business. In order to achieve this vision, we plan to reach annual steel output of 70 million tons by 2020, making POSCO the world’s top producer; in the materials sector we are aiming to become a global materials company focusing on environment-friendly materials based on steel; in the energy sector we will leap forward as a world-leading general energy company by cultivating the IPP (Independent Power Producers) and renewable energy businesses, becoming the top company in those countries we are operating.

POSCO Family’s low-carbon, green growth strategy will also contribute to our achievement of Vision 2020. We are aiming to become the “Global Green Growth Leader” by taking initiative in four areas: Green Steel, Green Business, Green Life and Green Partnership. Based on breakthrough low-carbon technologies such as extreme energy reduction and efficiency improvement and development of CO2-reducing steelmaking processes, we will expand development and supply of energy-efficiency steel, enhancing our competitiveness in the area of Green Steel. We are also actively pursuing the new & renewable business at the Family level such as wind power, fuel cells for power generation and refuse-derived fuel, while identifying new growth drivers in the green business such as smart grid and lithium-ion battery materials to cultivate Green Business as our core business. In addition, the Green Walk campaign where POSCO Family employees and their family members practice green lifestyles, and the carbon-neutral program that supports the project to reduce greenhouse gases in society are some of our efforts to expand the scope of the Green Life initiative. We are also pursuing Green Partnership by cooperating in carbon policies at home and abroad to establish leadership in the fight against climate change and building a low-carbon society.

viSion/StrateGy/ tarGet

Global Green Growth leaderReduce by 9% the amount of CO2 emitted per ton of steel produced by 2020 with reference to the

average amount between 2007~2009. Reduce GHG in society by 14 million tons a year (by promoting the use of high-efficiency steel and developing green businesses)

Invest KRW 7 trillion by 2018 in low-carbon steel and green businesses, creating 87,000 jobs in green industries

Green buSineSS• Focus POSCO Family competencies on green businesses such as new & renewable energy

Green liFe• Carbon-neutral Program, Green Walk Campaign, Green Steelworks

Green partnerShip• Engage in climate change policy cooperation

• Transfer and spread green technology

Green Steel• Make breakthroughs in steelmaking processes

• Supply high-efficiency steel products and

develop ultra-light steel products

lOW-CARBON, GReeN GROWTH VISION FOR THe POSCO FAMIlY

Intro > GREEN

STEEL > GREEN BUSIN


PARTNERSHIP

11

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

POSCO’s Voluntary Reduction Target by 2020

POSCO announced its voluntary GHG reduction target by 2020 at the 7th Green Growth Committee meeting chaired by the President of the Republic of Korea in 2010.

Between 2007 and 2009, our average CO2 intensity was 2.18 tons of carbon dioxide (t-CO2) per ton of crude steel (t-s) produced. The plan calls for this CO2 intensity figure to be lowered by 9 percent to 1.98 t-CO2/t-s by 2020. To this end, the company will invest KRW 1.5 trillion by 2018 to reduce the amount of coal used in steel production, improve energy efficiency, and develop breakthrough technologies regarding CO2 reduction and sequestering. We are developing and supplying high-strength steel sheet that reduces vehicular weight and thereby improve automotive fuel efficiency, as well as higher grades of electrical steel sheet that increase the energy efficiency of electric motors and transformers. Greater quantities of our blast furnace slag will be used in the production of environment-friendlier cement. POSCO and POSCO-invested companies will invest a combined KRW 5.5 trillion in new green growth businesses by 2020, reducing approximately 14 million tons of overall CO2 emissions a year in society.

GHG & energy Target Management Scheme

According to the Greenhouse Gas and Energy Target Management Scheme that was launched in 2010 under the Framework Act on Low Carbon, Green Growth, companies that emit more than 125,000 tons of CO2 per year are required to set energy usage targets. The number of companies bound by this obligation in 2012 was 458, and the target compliance obligation began in 2012. Within the POSCO Group, twelve worksites including Pohang and Gwangyang Works submitted statements of GHG emission volumes and energy consumption to the government after verification by an independent third party. POSCO’s reduction obligation in 2012 was 963,000 tons compared to the sales forecast for 2012, and we expect to meet this obligation thanks to our efforts to reduce GHG emissions. We submitted the 2013 implementation plan at the end of 2012, and we will accomplish our target in 2013 as well through continued CO2 reduction activities by improving energy efficiency.

2007~2009

Base Year

-3%-6%

2.18

2015

Target

2.11

2020

Target

1.98

2012

Performance

2.03

Reduction withbreakthrough technologies

Reduction with currently available technologies

POSCO’S TARGeT FOR ReDUCING CO2 INTeNSITY

POSCO referred to the IPCC Guidelines for National Greenhouse Gas Inventories, WBCSD/WRI Greenhouse Gas Protocol, World Steel Association Guidelines, and ISO TC 17/SC draft Calculation Method for CO2 emissions intensity from Iron and Steel production (August 27, 2010) to devise the POSCO GHG Accounting Guidelines for calculating GHG emissions as befits the steel industry.

- Boundaries for measurement: Pohang Works and Gwangyang Works

- Direct emissions (Scope 1): The CO2 emissions from vehicles on the steelworks sites are negligible and therefore not included

- Indirect emissions (Scope 2): Refers to indirect emissions from the consumption of purchased electricity

The coal emission factor is a 2006 standard; a unified figure is used from 2007 onward.

The recorded CO2 emission volumes are based on the company’s GHG reporting guidelines. The calculated values may vary with the Guidelines for GHG & Energy Target Management Scheme announced in March 2011 by the government for carbon regulation.

(Unit : t-CO2 / t-s)

Intro > GREEN

STEEL > GREEN BUSIN


PARTNERSHIP

12

2012 CARBON REPORT

Carbon report 2013

naviGation Menu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

GHG emissions from Iron & Steel Making Processes

Carbon dioxide (CO2) constitutes most of the greenhouse gas emissions generated at the POSCO Pohang Works and Gwangyang Works. The combined CO2 emission volume was 77 million tons in 2012, down from 78.2 million tons in 2011. While steel output in 2012 increased by 1.8 percent in 2012 at 38 million tons compared to that of 2011 at 37.3 million, CO2 emission decreased by 1.5 percent. Carbon dioxide intensity per ton of crude steel produced, which indirectly indicates how much energy efficiency has improved, dropped significantly by more than 3 percent, from 2.10 t-CO2/t-s in 2011 to 2.03 t-CO2/t-s in 2012. This reduction year on year is attributable to better energy efficiency achieved from reduced coal demand in the iron-making process and enhanced waste gas recovery rates during the steelmaking process, among others.

Other GHG emissions The CO2 generated while transporting purchased iron ore, coal and limestone – all raw materials needed in steel production – to the steelworks as well as those emissions from employees’ commuting to and from work and taking business trips inside and outside Korea in 2012 are as follows:

GHG Reduction effect in Society

High-strength steel sheet can be used to lighten vehicles and therefore improve fuel efficiency. Low-core-loss electrical steel sheet can increase the energy efficiency of electric motors and transformers. The expanded use of these “energy-efficiency” steel products is estimated to have decreased CO2 emissions in general society by around 3.17 million tons in 2012. Granulated blast furnace slag, a byproduct generated during steel production, was used as an environment-friendlier ingredient for cement, lowering CO2 emissions in society by an additional 6.29 million tons or so.

Carbon Accounting

Carbon accounting is a process for calculating the costs and benefits, in monetary units, of carbon management activities. The purpose of carbon accounting is to support strategic decision making and enhancing POSCO’s sustainable carbon competitiveness. Reduction means are identified and analyzed taking into account the market conditions, government regulations, GHG reduction volume and costs invoked thereof, and analysis results are used for establishing internal strategies and responding to internal/external requests for information disclosure.

New facility investments executed in 2012 amounted to KRW 27.3 billion. Among these, KRW 22.6 billion was spent in building new energy reduction facilities such as the dezincification facility at Pohang Works and high efficiency inverters at Gwangyang Works. Meanwhile, KRW 1.8 billion was invested in reinforcing systems to raise heat efficiency during processes inside the steelworks. Process improvement cost KRW 2.9 billion. R&D projects launched in 2012 to find new ways to reduce GHG emissions, including waste heat recovery from iron and steel making processes and CO2 separation from waste gas, represent a total investment of KRW 76.3 billion.

perForManCe

Transport of purchased raw materials Employee commuting Business travel

Other emissions (Scope 3) 1,022 5.6 1.5

* Calculated by referring to the WBCSD/WRI Greenhouse Gas Protocol.

* The total weight of the purchased coal was 88 million tons, which is reflected in the calculation of other CO2 emissions.

* The total number of employees stands at 17,623 as of the end of 2012.

OTHeR CO2 eMISSIONS (UNIT: THOUSAND t-CO2)

CO2 reduction in society (thousand t-CO2/yr) 659 2,510 6,290

Sales volume (thousand tons) 818 429 8,013

GHG ReDUCTION eFFeCT IN SOCIeTY (BASED ON THE 2012 SUPPLIES)

Low-core-loss electrical steel2)

Granulated blast furnace slag3)

High-strength steel sheet for automobiles1)

(Unit : t-CO2/t-s)

CO2 eMISSION INTeNSITY

2.13

0.09

2.04

2.10

0.10

2.03

0.09

1.94

2010 2011 2012

Total Emission Intensity

Indirect emission (Scope 2)

Direct emission (Scope 1)

1 ) High-strength steel sheet refers to HSS (High-Strength Steel) with a tensile strength of at least 590 MPa as well as AHSS (Advanced High-Strength Steel) with a tensile strength of 440 MPa or more, combined with excellent machinability. The CO2 reduction volume was calculated by estimating the amount of weight reduced when applying the HSS and AHSS to a Korean automaker’s passenger vehicle (with 2000cc displacement).

* CO2 reduction effect per ton of high-strength steel: 0.81 t-CO2/year

(Fuel efficiency improvement through ve-hicular weight reduction (7.05L/yr ∙ number of vehicles) X Number of vehicles produced per ton of high-strength steel (54) X road transportation CO2 emission factor (0.069 kgCO2/MJ, based on IPCC Guideline, gasoline cars) X calorific value (31MJ/L, Energy Act Enforcement Regulations))

2 ) Low-core-loss steel refers to grain-oriented electrical steel with a core loss of less than 0.98 W/kg as well as non-oriented electrical steel with a core loss of less than 4.7 W/kg. The CO2 reduction volume was calculated by estimating the effect of improved energy efficiency when the steel plate is applied to motors and transformers.

* CO2 reduction effect per ton of low-core-loss steel: grain-oriented 1.02 t-CO2/yr, non-oriented 10.75 t-CO2/yr

(Reduced power consumption per ton of grain-oriented steel plate (2.29 kWh/yr) X GHG emission factor of national power (0.445 kgCO2/kWh, Korea Energy Management Corporation), Reduced power consumption per ton of non-oriented steel plate (24.18 kWh/yr) X (0.445 kgCO2/kWh, Korea Energy Management Corporation))

3 ) The CO2 reduction volume was calculated by applying the standard presented in the IPCC Guideline which estimates a reduction of 0.785 t-CO2/t-Clinker when replacing each ton of cement with a ton of clinker.

2.00

Intro > GREEN

STEEL > GREEN BUSIN


PARTNERSHIP

13

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Steelworks sites (owned by POSCO)

38

24 ~25

2.510

24 ~25

0.659

169,000

28

6.290

Co2 eMiSSionreduCtion

produCtion oFCrude Steel

From employees’ commuting and business trips

7.1

enerGy

49iron ore

35Coal

5.1limestone

electricity

927MW

2,390klheavy oil

lnG

828Mnm3

Scope 3

1.022

From transporting purchased raw materials

13 Co2 81% Co2 8% Co2 5% Co2 3%

Co2 2~3%

FoGCoG

8%

47%

45%1,392MW262MW

ldG

o u t P u tI n P u t

bFG

Commissioned sites

Scope 1, Scope 2

77 million tons

Technology energy recovery

Electricity Steam Hot water Other

1 Recover, refine and reuse byproduct gas from blast furnace, Finex, coke oven and basic oxygen furnace as fuel

2 Recover sensible heat from hot coke through heat transfer with cooling gas

3 Improve coke strength and blast furnace productivity by adjusting moisture content of coal fed to coke oven

4 Recover sensible heat from sintered ore cooling process

5 Generate power using pressure of byproduct gas discharged from blast furnace

6 Recover sensible heat from hot stove waste gas

7 Feed pulverized coal, instead of coke, directly into blast furnace

8 Recover sensible heat from gas generated in process

9 Enhance energy efficiency by injecting argon gas to basic oxygen furnace from the bottom

10 Minimize energy loss by reducing transport time from tapping to backend process

11 Save energy for reheating by directly injecting hot slab

12 Recover sensible heat of off-gas from reheating furnace

13 Save reheating energy for pickling through low-temperature processing

2

3

7

6

5

4

poSCo Carbon FloW

12

11

8

13

10

8 9

1

Best available technologies of CO2 emission reduction

Breakthrough technologies under development 20~22

13

raW MaterialS

(for power generation & industrial uses)

Co2 eMiSSionS(unit : million tons)

(unit : million tons)

lIMe kIlN

The six GHG targets by the Kyoto Protocol are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride

(SF6), hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs). GHG generated from steelmaking is mostly CO2 attributable

to the coal supplied both directly and indirectly to the blast furnace. In the blast furnace, coal serves as an iron reducing

agent and is hard to substitute. CO2 emission from the iron-making process, which includes iron reduction, constitutes most

of the total emissions from production. POSCO is assessing not only the CO2 volume emitted from production at the Pohang

and Gwangyang Works but also the emissions generated from the transport of raw materials to and within the steelworks

as well as employees’ commuting and business travels. We also calculate the CO2 emission volume in society that could be

reduced assuming POSCO’s high-efficiency products are used in place of conventional products. The POSCO Carbon Flow

shows the flow of CO2 throughout the production process and activities. Also explained are the major low-carbon and high

energy-efficiency technologies and facilities applied to each steelmaking stage.

This diagram illustrates the site boundaries, production process, statistics of major materials used, indirect CO2 emissions from raw material transport and use of products/byproducts, and CO2 reduction performance of the Pohang and Gwangyang Works in 2012. The recorded CO2 emission volumes and percentages by process are from company GHG reporting guidelines. The calculated values may vary with the Guidelines for GHG & Energy Target Management Scheme announced with regard to the government’s carbon regulations.

Scope 1 Direct emissions from sources containing carbon that are owned or controlled by POSCO

Scope 2 Indirect emissions from consumption of purchased electricity, heat or steam

Scope 3 Other indirect emissions from transporting purchased raw materials, and employees’ commuting and business travels

Coke dry quenching

Coal moisture control

Heat recovery from sinter waste heat

Sensible heat recovery from sinter process Iron reduction using hydrogen PS-BOP (POSCO Basic Oxygen Process)

Finex hiGh Mill StainleSS Steel

Reducing molten iron lead time

Hot stove waste heat recovery

Heat recoveryfrom waste gas

BOF bottom stirring

ContinuouS CaSter hot rollinG Mill Cold rollinG Mill

Coke

blaSt FurnaCeSinter Converter

Power generation by recovering waste heat from stacks

Ironmaking

The primary process that produces molten ironIron ore and coke are placed at the top of the blast furnace. Huge quantities of hot air are blasted into the bottom of the furnace. Molten iron collected at the bottom after the reduction reaction is carried out.

Refining the molten iron to produce steelThe molten iron produced in the blast furnace contains many non-process elements, including carbon, phosphorus and sulfur. These are removed by blowing high-purity oxygen through the molten metal.

Solidifying the molten metalOnce the non-process elements have been removed, the molten metal is conveyed to the continuous casters, which turn it into intermediate products such as slabs, blooms or billets.

Producing steel sheet or wireThe slabs, blooms, billets and other intermediates pass through a series of rollers to be flattened. The rolling processes are classified as either hot or cold, depending on the intended use of the final product.

Steelmaking Casting Hot Rolling Cold Rolling

Low-temperature pickling

Heat recovery from waste gas

Hot charge rolling

Heat recovery from reheating furnace

Sensible heat recovery from slag

Pulverized coal injection

Top pressurerecovery turbine

electric Arc Furnace

of the recovered waste gas is sold. Waste gasrecovery

Waste gas separation

of the recovered waste gas is reused directly in the production process.

Captive power generation satisfies 64% of the electricity demand.

Waste gas power generation

Power generation using LNG

LNG

Best available technologies of CO2 emission reduction

Co2 eMiSSionS

million tons

(unit : million tons)

High-strength steel sheet for automobiles

• Lighten vehicles• Improve fuel efficiency

low-core-loss electrical steel

• Increase energy efficiency of electric motors and transformers

• Supply of eco-friendly cement

Supply of recovered steam

• Used for district heating and related industries

Granulated blast furnace and Finex slag

GHG emissions from POSCO’s Steelworks

(unit : tons)

Carbon report 2013

report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

naviGation Menu



The steel body frame for electric vehicles (PBC-EV) developed by POSCO applies cutting-edge technologies to ultrahigh-strength steel, making automobiles 26% lighter and greatly reducing greenhouse gas emissions. The fact that we realized the body frame solution for EVs for the first time in the world bears even more meaning.

Senior Researcher Kim, Jae-hyun | POSCO Songdo Product Application Center

Co2 reduction effect in society through high-efficiency steel

POSCO’s energy efficiency steel products such as automotive high-

strength steel sheet that make automobiles lighter thus improving fuel

efficiency, as well as low-core-loss electrical steel plates that improve

energy efficiency of motors and transformers reduce CO2 emissions,

contributing to lowering greenhouse gases in society. In 2012, we put

our efforts in expanding the sales of energy efficiency steel products,

reducing 3.17 million tons of greenhouse gases in society.

3.17million t-CO2

Green Steel

Carbon report 2013

naviGation Menu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

enerGy eFFiCienCy iMproveMeMt enerGy eFFiCienCy iMproveMent

Roadmap for Raising energy efficiency● 1st Stage : 1999~2008

POSCO made a voluntary agreement with the government to improve energy efficiency, and this was implemented in two phases from 1999 to 2008. Over that ten-year period, a total of KRW 1.43 trillion was invested in energy-related facilities and 2,100 projects were carried out. These included the construction of a combined-cycle power plant fueled by the byproduct gas from the Finex plant, waste heat recovery systems, and coke dry quenching (CDQ) facilities. As a result, installation of waste heat recovery facilities is now 97% complete, conserving 2.91 million tons oil equivalent (TOE) per year. In addition, we have built an integrated energy data system that accumulates our energy-saving operation techniques. The system disseminates ideas and diagnostic methodology for energy management and shares the results organization-wide.

● 2nd Stage : 2009~2015

Most of the investment projects for large-scale heat recovery facilities were completed by 2008. In the following year, therefore, we began to identify and invest in additional small-and medium-sized projects for improving energy efficiency that apply convergence technologies. We installed a heat recovery steam generator (HRSG) in our new Steel Mill No.3 at the Gwangyang Works in 2010. CDQ (coke dry quenching) facilities and HRSGs were constructed inside Coke Plant No.5 and Sinter Plant No.5 at Gwangyang in 2011. Meanwhile, two combined-cycle power plants have been completed with investment from the operator, POSCO Energy, and operated since its completion in December, 2010. These plants collect the surplus blast furnace gas generated since the production capacity expansion at the Gwangyang Works. Small-and medium sized projects are also being carried out to raise energy efficiency of our production facilities. Starting in 2009, inverter technology has been applied to all the high-voltage motors used on our premises. These activities enabled us to save 434,000 TOE in 2012. Furthermore, a “smart industry” pilot project, which integrates information technologies with steelmaking technologies, was launched at the Gwangyang Works oxygen plant in 2010 and is planned to be expanded to the steelworks in the mid-to long-term timeline. Last, with the execution of the Greenhouse Gas & Energy Target Management Scheme in 2011, we acquired ISO5001 EnMS (Energy Management System) certification, continuing our efforts to efficiently fulfill our energy reduction target.

● 3rd Stage : 2016~2020

We recognize that applying currently available technologies will have limited results in making further improvements to energy efficiency, and efforts have been stepped up to develop additional breakthrough technologies slated for commercialization by 2020. These include reheating furnaces that use pure oxygen, recovery of sensible heat from molten slag, and low-medium temperature thermoelectric generation.

Invest in large-scale energy recovery facilitiesAccumulate energy-saving operation methods

Invest in small-and medium-sized projects for improving energy efficiencyCreate “Smart Industry” technologies

Commercialize unique innovativetechnologies to take energy efficiency to the next level

Investment in energy efficiency facilities : KRW 1.43 trillion

1st Stage 1999~2008 2nd Stage 2009~2015 3rd Stage 2016~2020

POSCO’s Roadmap for energy efficiency Improvement

Estimated additional investment : KRW 750 billion (2010~2020)

INTRO > Green

Steel > GREEN BUSIN


PARTNERSHIP

17

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

energy-saving Activities

● Use of Byproduct Gas and Waste Heat/Pressure for Captive Power Generation

Most of the off-gas (BFG, COG, LDG, and FOG) generated during iron-making and steelmaking processes is recovered and used as energy sources or for generating electricity. Off-gas-fired generators, coke dry quenching (CDQ) facilities and LNG combined-cycle power plants supplied about 70 percent of the electricity used at the Pohang and Gwangyang Works in 2012.

● BFG in Combined-cycle Power Generation

POSCO Energy, a power plant operator, completed construction of two combined-cycle power plants at the Gwangyang Works in August and December, 2012 respectively to improve the captive power generation efficiency. The construction in Pohang will be completed in 2013. While combined-cycle generation boasts higher energy efficiency, meeting its fuel requirements is difficult. In order to use blast furnace gas (BFG) with low calorific value as fuel for combined-cycle generation, POSCO devel-oped a technology that uses coke oven gas (COG) which has high calorific value as auxiliary fuel to solve this problem.

● Task Force for Reheating Furnace Combustion efficiency

The Pohang and Gwangyang Works formed a task force dedicated to enhancing the combustion efficiency of all reheating furnaces, which consume the most energy. In 2012 the team was upgraded to an official unit. Their activities include, standardizing the management process after unclogging and cleaning pipes, minimizing heat dissipation, developing the charging platform curtain to improve processing control, installing combined refining facility to effectively block impurities in byproduct gas, and developing the pure oxygen lancing burner technology. Their activities will continue in 2013.

● Pulsating Combustion Technology for Burner with Direct Heating Mode

In 2012, POSCO began development of the pulsating combustion technology to reduce the amount of NOx generated at the combustion facilities and improve combustion efficiency. This technology increases heat transfer and efficiency by feeding fuel to the intake duct at a steady pulse and oscillation. With this technology, we expect a 3 percent decrease in fuel consumption and over 30 percent decrease in NOx generation.

PUlSATION CONTROl VAlVe

Piston

Rotary valve & Fixed plate

Driving part 3%

30%

Decreased fuel consumption

Decreased NOx generation

ReHeATING FURNACe

Preheating zone

Slab

Heating zone Soaking zone

Laser-based oxygen analyzer

INTRO > Green

Steel > GREEN BUSIN


PARTNERSHIP

18

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

● Smart Industry

The smart grid is an advanced electricity transmission and distribution network that utilizes information technologies to maximize energy efficiency through interactive, real-time communication between the provider and consumers. In 2010, we launched a “smart industry” pilot project in our oxygen plant at the Gwangyang Works. The pilot project is intended to test the smart industry project, which aims to enhance energy efficiency, cut costs, and stabilize facilities by combining our energy and information technologies. In the pilot project, POSCO established an analyzer infrastructure for energy efficiency assessment and developed a system for facility unit efficiency analysis and optimal guidance, subsequently reducing the plant’s electricity consumption by 2 percent compared to 2011. In 2012, we examined the roadmap for expanding the project throughout the company. We will start our phased expansion plans in Pohang Works’ Steel Plant No. 3 and Gwangyang Works’ plate factory in 2013.

● energy Saving in electrical Room lighting

We built a control system (remote timer) for those locations that have installed natural lighting windows and related lighting circuit systems, used as an alternative to artificial lighting. The remote timer that automatically turns on the lighting only when necessary enabled us to save more than KRW 900 million at Pohang and Gwangyang Works’ wire plants. In addition to using natural lighting, 9,690 factory lights were changed to LED lights using POSCO LED’s technology, and replacements will continue until September 2013. This project not only improved working conditions, but enabled us to save KRW 500 million in electricity bills through LED lights’ longevity and reduced maintenance costs.

Installation of Natural lighting Windows

Interior illumination, which was 80 lux prior to installing the natural lighting windows, was increased to 500 lux after installation (during daylight hours).

Office lighting Factory lighting

SMART INDUSTRY

energycontrol

Water, Gas・Oil

Factory

Production control

Optimal energy-use patterns

Current load (electricity, heat, gas, water)

Process A

Sales

Process B

Production data

Production data

Order receiptElectricity

INTRO > Green

Steel > GREEN BUSIN


PARTNERSHIP

19

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Technology for Capture of CO2 from Steelmaking Byproduct Gas

POSCO is currently working on a process that uses ammonia to absorb and separate CO2 from the blast furnace gas (BFG) generated during steelmaking processes. Medium and low temperature waste heat generated at the steelworks serve as the energy needed to reclaim the CO2, making it possible to separate carbon dioxide at low costs. An R&D project for this new technology was launched in 2006, and the first pilot plant with a processing capacity of 50 Nm3/h started up in December 2008. It has attained a CO2 capture efficiency of over 90 percent and CO2 purity of at least 95 percent. The second stage pilot plant (capacity of 1,000 Nm3/h) began construction in 2010 and was completed in July, 2011 at Pohang Works. In 2012, we expanded the liquefaction facility that stores the recovered CO2. We are aiming to commercialize the technology by 2015 and we expect to capture approximately 300,000 tons of CO2 annually.

PS-BOP (POSCO Basic Oxygen Process)

Generally, the steelmaking process is divided into two types: the integrated mill where iron ore is the main raw material, and electric arc furnace which uses steel scrap as its main material. In the integrated mill process, large amounts of CO2 is generated during the reduction process resulting in high CO2 emission intensity, while the electric arc furnace that uses steel scrap, which does not require reduction treatment, has a comparatively low CO2 emission intensity. Recently, the integrated mill uses some scrap in the basic oxygen furnace to lower CO2 emission intensity. However, the heat source required to melt it was insufficient, limiting the use of steel scrap to only 15 percent. POSCO is developing a new PS-BOP that pushes up the ratio of scrap steel to 50 percent. The new basic oxygen process is designed to add hot blowing from the top while feeding fuel from the bottom. In 2012, the construction for a basic oxygen process with an annual capacity of 800,000 tons has begun, which will be completed and ready for operation by early 2013.



Second Pilot Plant

Boiler

Regenerator Absorber

Steam

BFGCO2 + N2 + CO

High purity CO2 N2 + CO

CondensateSteam 160°C

CAPTURe OF CO2 FROM STeelMAkING BYPRODUCT GAS USING AMMONIA, DIAGRAM

Waste heat recovery CO2 capture

PS-BOP

Fuel

Steel scrap Hot blowing

Decarburization

50%15%Scrap usage ratio to total input

800,000 tonsCapacity

Secondary combustion

INTRO > Green

Steel > GREEN BUSIN


PARTNERSHIP

20

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Slag Heat Recovery

Slag of over 1400°C is a byproduct of iron-and steelmaking. It is either rapidly cooled by water and used as a cement substitute or slowly cooled in air and used as roadbed material. In addition, POSCO has been involved since 2009 in a project to develop technology that recovers slag heat to raise the energy efficiency of steelmaking and to reduce CO2 emissions, and field operations in a pilot plant started in 2012. The development of a unique slag heat recovery prototype has been completed and a field test is underway, with the goal to achieve a heat recovery temperature of at least 450°C and recovery rate of 45 percent or higher.

Technology for Sequestration of CO and CO2 Using the PSA Method

In order to respond to climate change, it is necessary to develop low-CO2 iron-making processes and ways to utilize byproduct gases. Since 2011, POSCO began developing an optimal process and adsor-bent for CO and CO2 sequestration from byproduct gases using the PSA* method. We reached over 90 percent capture purity of CO and CO2 through the small 1st stage pilot device of 1 Nm3/h capacity. By 2014, we will apply the device on a plant with at least 100 Nm3/h capacity, achieve over 95 percent CO and CO2 purity and commercialize the technology by 2015.

Small lab scale pilot facility of 1Nm3/h

OPTIMIZATION OF THe GAS SeQUeSTRATION PSA PROCeSS FOR BYPRODUCT GAS FROM STeelMAkING

Develop adsorbent

co - PSa

co

co2

co2 - PSa

Preprocessing

de-dust

de-water

90%2012

95%2014

Co & Co2 purity

45%

450 C

RIST-POSCO SlAG HeAT ReCOVeRY TeCHNOlOGY

Slag 1200~1400°C

Slag particle 1000°C

Hot air 450°C

Tilting receiver

Magnetic separator

Heat Recovery Temperature

Recovery Rate

Granulation unit

Sensible heat recovery chamber

* PSA(Pressure Swing Adsorption)

INTRO > Green

Steel > GREEN BUSIN


PARTNERSHIP

21

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

* Seebeck effect: a phenomenon in which a temperature difference (△T) between two dissimilar electrical conductors or semicon ductors produces an electromotive force at the junctions in proportion to the temperature difference.

Hydrogen Steelmaking

POSCO is currently developing steelmaking technologies that use hydrogen as the reducing agent instead of coal, preparing for the future when mass-produced, clean-burning hydrogen will be available. A short-term objective is to develop the technology to capture hydrogen in byproduct gases from steelmaking and use it for reducing iron. Over the mid-/long-term, the company is working on hydrogen reduction steelmaking technology that uses massive high-density hydrogen.

Thermoelectric Power Generation by Recovering Waste Heat

The heat generated from reheating furnaces contains abundant energy, but recovering the medium-/low-temperature heat streams was difficult for technical and economic reasons. POSCO is currently developing a power generation technology that transforms waste heat energy to electricity using the Seebeck effect*. This technology boasts no noise and no maintenance costs, and can be applied to various types of heat sources. We are aiming to complete a 5kW system with generation efficiency of at least 5% by 2014.

PRINCIPle OF THe SeeBeCk eFFeCT

n-ty

pe

p-ty

pe

∆T

Current

MetallicElectrodes

heat SourCe

MetallicElectrodes

Seebeck principle

5kWGeneration capacity in 2014

5%Generation efficiency at least

Fe2O3+3H2 � 2Fe+3H2O

HYDROGeN STeelMAkING PROCeSS (BY 2050)

Mass-produced,

clean-burning hydrogen

low-carbon electricity

Finex fluidized reduction furnace

Large electric arc furnace

Hot charge rolling Hydrogen Heating

Iron ore fines

Power supply

Reduced iron

H2

holder

INTRO > Green

Steel > GREEN BUSIN


PARTNERSHIP

22

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

● GHG Management System

POSCO has developed in-house guidelines for calculating GHG volumes based on the internationally-used IPCC1), WBCSD2), WRI3), World Steel Association, and ISO 144044). These guidelines have been used since 2006 to construct a GHG management system. In 2011, we updated our GHG management system to accommodate the Korean government’s GHG & Energy Target Management Scheme. The calculated amounts of GHG emissions include the figures for eleven worksites including Pohang Works, Gwangyang Works, POSCO Center in Seoul, and Global R&D Center in Songdo. The GHG emissions for steel production processes are calculated on the basis of raw materials with carbon content (such as coal, limestone and natural gas), the amount of purchased electricity, production volumes, and byproduct sales volumes. The CO2 intensity per ton of crude steel (t-CO2/t-s) is managed as a key performance index (KPI). Meanwhile we are currently developing a computerized system of global standards for the integrated GHG and energy information management that meets the domestic and international climate change policies, targeting 2014 as its timeline. We will use this system to improve energy saving processes for low-cost operations and build a system for the GHG reduction target management process, preparing for the national GHG emission trading system that will start in 2015.

●Carbon Accounting System

With toughening regulations related to low-carbon, green growth and carbon emissions, the importance of strategic decision making at the corporate level is rising. Recognizing that the existing accounting method has limits in its ability to accurately analyze the efforts and performance of carbon reduction and help top management’s decision making, POSCO and POSRI are jointly researching ways to introduce carbon accounting. We are developing software that will help top management make decisions based on reduction potential and reduction costs, enabling us to reduce greenhouse gases in a cost effective manner.

●ISO 50001 Certification

Our business environment is changing as various stakeholders’ demand for reduction increases, domestic, international carbon & energy regulations come into effect, and energy efficiency regulations are sometimes used as trade barriers. In response to these changes, POSCO will achieve real energy reduction through the establishment of the energy management system. Since 2008 we have participated in an energy management system pilot project sponsored by Korea Energy Management Corp. (KEMCO). The ISO 50001 (energy management system), on which discussions started in 2008, was finalized in June 2011. POSCO set up a task force in January 2012 and acquired the ISO 50001 certification in September, 2012.

●Internal Reward Program for GHG Reduction

An incentive program has been devised for those in production units who achieve reductions in GHG emissions through their energy efficiency improvement activities. To facilitate program operation, a system has been developed whereby the results of actual performance against GHG reduction targets can be checked online for each unit and production activity on a daily basis. Most of the production units have participated in the program since January 2011, and after evaluation of reduction performance, incentives are awarded to those units who showed outstanding results. This program not only increased the shop floor units’ understanding of greenhouse gas emission management, but enforced the will toward carbon management from top management to on-site personnel. We are also devising a plan to reflect carbon in our costs to encourage shop floor employees’ activities to reduce greenhouse gases.

1 ) IPCC: Intergovernmental Panel on Climate Change

2 ) WBCSD: World Business Council for Sustain-able Development

3 ) WRI: World Resources Institute4 ) ISO14404 : Calcuation method of carbon

dioxide emission intensity from iron and steel production


Greenhouse Gas Management System

Phase1inventory Management

Calculate GHG emissions at all operation sites

Phase 2project Management

Assess the performance of reduction efforts in relation to the inventory,Analyze CO2 performance

Phase 3Strategy Management

Use as a decision-making tool in light of reduction potential and economic benefit


INTRO > Green

Steel > GREEN BUSIN


PARTNERSHIP

23

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Automotive High-Strength Steel Sheet

Reducing the weight of an automobile is one of the most effective ways to improve fuel mileage and lower GHG emissions. While figures vary by vehicular type, a 10 percent reduction in the overall weight will normally cut CO2 emissions by 5-8 percent. When applied to automobiles, high-strength steel1) sheet can be made thinner than mild-grade sheet, reducing the overall curb weight without compromising strength. The energy efficiency of the automobile is improved as a result. Assuming a vehicle made of high-strength steel sheet travels 19,000 km2) a year (in Korea), one ton of high-strength steel will lower the CO2 emission by eight tons over ten years. As high oil prices continue and concern about fuel mileage grows stronger, automakers are using more high-strength steel sheet to make their products lighter. In 2012, the sales of AHSS reached 567,000 tons, up by 20 percent from the previous year. POSCO continues its investments to produce such high value added products, and cooperates with automakers to develop more efficient vehicles in the environmental, economic and social aspects.

High-grade electrical Steel Plate

The demand for electrical steel plate which is used in generators, power transformers and electric motors is expanding as the call for clean energy rises. It can be classified into two main types: grain-oriented and non-oriented. Grain-oriented electrical steel plate is a soft magnetic material which after undergoing special processing, the grain’s easy magnetization direction is aligned to the rolling direction, which then boosts its magnetic properties. Similar to the concept of “resistance” in electricity, core loss occurs during magnetization, and lower core loss means higher energy efficiency. Grain-oriented electrical steel plate is widely used as a core material for such static equipment as transformers, converters and rectifiers. Non-oriented electrical steel plate has similar magnetic properties in all directions - rolling or otherwise. It is applied to the iron core of a wide range of rotating machines such as large-scale generators and small precision motors, and also has good qualities for application in small-scale transformers. High-grade electrical steel plate is more reinforced with the rolling direction compared to the normal electrical steel plate. It has low core loss and high magnetic induction properties, which results in improved energy efficiency of the end product. POSCO supplied 428,000 tons of high-grade electrical steel plates in 2012.

1) Automotive high-strength steel refers to High-Strength Steel (HSS) with a tensile strength of at least 590MPa as well as to Advanced High-Strength Steel (AHSS) with a tensile strength of 440MPa or more.2) Distance traveled in one year by a passenger vehicle (National Transportation Safety Board, 2006)

Reduction of CO2 emissions in society from automotive high-strength steel

2009 2010 2011 2012

CO2 reduction throughout the product lifecycle 2,876 5,020 6,308 6,626

CO2 reduction per annum 288 502 631 659

Sales volume (thousands of tons) 357 623 783 818

The CO2 reduction was calculated by estimating the amount of weight lost when applying HSS and AHSS to a Korean automaker’s passenger vehicle

(with 2000 cc displacement).

(Unit: thousands of CO2 tons)

enerGy eFFiCienCy Steel

enerGy eFFiCienCy Steel

INTRO > Green

Steel > GREEN BUSIN


PARTNERSHIP

24

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

* “High-grade grain-oriented electrical steel” refers to steel sheet with an iron loss of 1.05 W/kg or lower.** CO2 reduction throughout the final product lifecycle (transformer), assuming 30 years of use.

CO2 reduction effect from using high quality grain-oriented electrical steel*

2009 2010 2011 2012

CO2 reduction throughout product lifecycle** 5,463 5,560 6,709 6,571

CO2 reduction per annum 182 185 223 219



* “High-grade non-oriented electrical steel” refers to steel sheet with an iron loss of 4.70 W/kg or lower.** CO2 reduction throughout the final product lifecycle (motor), assuming 18 years of use.

CO2 reduction effect from using high quality non-oriented electrical steel*

2009 2010 2011 2012

CO2 reduction throughout product lifecycle** 24,544 33,507 42,779 41,343

CO2 reduction per annum 1,364 1,861 2,377 2,291



poSCo’s development of lighter steel body frame for ev

Image of vehicle employing PBC-eV (Imaginary) POSCO Body Concept-electric Vehicle

The automotive industry is focusing on developing advanced drivetrains and ultra-light automotive bodies to reduce GHG emissions.

POSCO and 16 other steelmakers participated in the Future Steel Vehicle (FSV) project of the World Steel Association’s automotive group

(WorldAutoSteel) aiming to develop a lighter body for small EVs, and unveiled the outcome in March 2011. At the same time, POSCO

independently developed a lighter steel body for EV, dubbed POSCO Body Concept-Electric Vehicle (PBC-EV) and completed the prototype

in December 2011. PBC-EV employs over 40 percent of ultra high strength steel as well as cutting-edge processing expertise such as

hot press forming and multi-directional roll forming, which make the body 26 percent lighter compared to existing automotive bodies. In

life cycle assessment (LCA), PBC-EV will reduce CO2 emissions by almost 50 percent compared to the existing vehicles.

Steel type distribution in PBC-eV

Mg(Shee

t), 2.0%

hpF1470/2000, 8

.2%

Cp1180/1470, 1

0.3%

duplex, 3

.9%

tWip9

80, 10.4%

trip9

80,1180, 3.3%

trip5

90, 1.6%

dp980, 9

.3%

dp490/590/780, 1

5.6%

etC, 0

.53%

e-eS/

C/r Cl

ass, 3

2.9%

Mild, 2

.5%

Current phase of development

Project Vehicle weight GHG emissions Development stage

WorldautoSteel FSv down 35% 70% down

Concept prototype (Seventeen companies including poSCo participate)

for small vehicles

poSCo body Concept down 26% 50% down

Concept prototype

electric vehicle for sedans

INTRO > Green

Steel > GREEN BUSIN


PARTNERSHIP

25

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

poSCo’s Green building

The “Green Building” first emerged at the Rio Summit in 1992 and refers to buildings that are designed, constructed, operated and

dismantled using environmentally-friendly methods. POSCO joined hands with Yonsei University to develop an energy-saving building

model and held the POSCO Green Building groundbreaking ceremony at the Yonsei International Campus in Songdo in March, 2012. This

building taps into more than 110 eco-friendly sources of energy such as solar energy, geothermal energy and rain water. The earthquake

resistant structural steel developed by POSCO will add to the safety of the building. In addition, it will utilize various technologies such

as modular building where most of the building is constructed at the plant and brought to the site to be assembled, as well as “green

cement” which substitutes cement with blast furnace slag. These technologies will have the effect of reducing 100 tons of CO2 per

annum compared to normal buildings.

1 Structural steel reuse technology

This technology applies seismic isolation damper to the earthquake resistant steel (SN) structure, making it strong against impact. It is an eco-friendly construction technology which minimizes CO2 emission, because it can be reused without loss of the structural part after deconstruction.

5 Modular construction technology

In modular construction, over 90% of a building is constructed at the plant then transported to the site to be completed after simple installation and assembly. It significantly shortens the construction period and assures a steady quality, while also allowing the reuse of the module after deconstruction, resulting in great reduction in CO2 emissions.

6 Aerogel windows

We will develop and apply aerogel insulat-ing windows which surpass the existing triple glazed or gas-filled windows in its insulation performance.

2 High insulation steel curtain walls

Conventional aluminum curtain walls are weak in strength and lack insulation proper-ties. We will apply the steel curtain wall which is stronger (3 times in modulus of elasticity) and seismic resistant (30 percent higher) than aluminum.

3 Poscrete

This technology replaces cement with blast furnace slag which is a byproduct of steel-making, and greatly reduces CO2 emissions when producing cement. Assuming all the blast furnace slag generated in Korea is used as cement 10 million tons of CO2 can be reduced annually.

2

1

3

49

8

56

7

8 energy management system

A cutting-edge building energy management technology using smartphones and mobile devices will be developed. This system will be used in monitoring the interior temperature, humidity, illumination, and CO2 levels and the collected data will be utilized in improving the building’s performance.

7 Rainwater reusing system

Rainwater is filtered and stored in a tank to be reused for gardening and cleaning when it’s not raining. POSCO will develop a storage tank using POSCO’s high corrosion resistant steel, extending the lifespan of the tank, reducing construction costs and minimizing construction waste material.

9 High insulation prefab exterior walls

We will develop and employ a high insulation prefab exterior wall. This will shorten construction time and enable easy remodeling by making the wall sections using steel at the plant, which will then be delivered to the site and constructed.

4 eco-friendly piles

Geothermal energy piles use the geother-mal heat (approx. 14℃) which remains relatively constant throughout the year in cooling and heating a building. By using high-strength pipe pile instead of concrete when installing the energy piles, construc-tion costs can be lowered by 20 percent and CO2 emissions can be reduced by 35 percent.

INTRO > Green

Steel > GREEN BUSIN


PARTNERSHIP

26

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

POSCO is actively implementing the marine foresta-tion project using Triton, the brand of the artificial reef made from slag which is a byproduct of steelmaking. Slag is rich in iron and calcium which helps the growth of algae as well as purifying contaminated seawater. Sea forests greatly help in reducing greenhouse gases because it acts as a sink. We will continue our research to find eco-friendly applications of slag to protect the environment.

Doctor Park, Heon-woo | Slag Utilization Research Team, RIST

amount of korea certified emission reductions (kCers) acquired

POSCO actively participated in the GHG reduction project organized

by the Korea Energy Management Corp. between 2005 and 2011.

For this project we undertook 14 tasks including increased power

production through efficient energy consumption and reducing

greenhouse gases through new & renewable energy businesses.

During 5 years, we acquired GHG registry credits of 3.55 million

tons, enabling us to take the lead in the carbon market.

3.55 million t-CO2

Trito

n Se

a Fo

rest

, Geo

mun

do, J

eonn

am P

rovin

ce. I

nsta

lled

in D

ec. 2

012

Green BuSIneSS

Carbon report 2013

naviGation Menu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

eCo-Friendly SlaG CeMent

Slag is a byproduct generated from iron-and steelmaking. Blast furnace slag comes from the iron making process, and steelmaking slag results from the steelmaking process. All blast furnace slag and steelmaking slag are reused as cement materials or aggregate substitutes. Liquid slag from furnaces is granulated when it is cooled rapidly in water and used a cement material. More than 80 percent of blast furnace slag at POSCO is produced as the granulated type.

Blast furnace slag is formed as a byproduct when producing molten iron in the blast furnace. The limestone reacts with substances other than iron. It is separated from iron using the specific gravity difference. When this is cooled rapidly with water it becomes granulated and is reused as cement material, slag powder, slag cement, and fertilizer. Replacing cement clinker1) with granulated blast furnace slag helps preserve natural resources such as limestone and reduce CO2 emissions. Thus, we use approximately 5% of slag when making Portland cement. Moreover, slag cement, a mixture of ground granulated blast furnace slag and Portland cement, reduces hydration heat in concrete and has stronger salt scaling resistance. Accordingly, slag cement is now used as an ingredient in the manufacture of mass concrete and marine concrete. In 2012, some 8.01 million tons of blast furnace slag from POSCO were used as substitutes for cement materials, lowering CO2 emissions in society by an estimated 6.29 million tons.

Z o o m

Development of PosMent

POSCO developed PosMent, a cement material that is more environmentally friendly than conventional slag cement. PosMent has higher slag content while maintaining high early strength. If this is used to replace cement clinker, natural resources such as limestone can be preserved and CO2 emissions cane be reduced by 60 percent compared to existing cement. PosMent has been tested on large structures that are prone to cracking or on sites located by the seashore, and showed successful results.

export of Granulated Blast Furnace Slag and Slag Powder

POSCO began exporting granulated blast furnace slag in 2011 under an annual contract. In 2012, we expanded our sales route to four Southeast Asian markets, sup-plying a total of 410,000 tons of granulated blast furnace slag. In August, 2012 we exported slag powder produced by POSFINE to Singapore for the first time, setting up an overseas sales network not only for the granulated blast furnace slag but also its processed form, slag powder. Through this sales network, we will prepare for the increase in domestically generated granulated blast furnace slag, while contributing to green growth by reducing fossil fuel consumption and preserving natural resources.

eCo-Friendly SlaG CeMent

1) Clinker: Intermediate cement product made by sintering limestone and other raw materials. Clinker is crushed fine to make Portland cement.2) Slag power: Ground granulated blast furnace slag.3) Slag cement: A mixture of Portland cement and a specific proportion of slag powder.

Cement ProduCtion ProCess

6.29 million tons

CO2 감축효과 분쇄기

CaCo3+heat → Cao+Co2

CO2 emission (0.785 tons of CO2 per 1 ton of clinker)

(without clinker producion process)

Electricity

Raw materials such as limestone and silica

Fuel

Slag powder 2)

Raw material crusher Crusher

CO2 emission reduction effect Crusher

Portland cement

Slag cement 3)

Clinker1)

Plaster, granulated blast

furnace slag

Granulated blast furnace slag

Blast furnace

INTRO > GREEN

STEEL > Green BuSIn

eSS > GREEN LIFE > GREEN

PARTNERSHIP

28

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

GHG Registry

POSCO actively participated in the GHG reduction project organized by the Korea Energy Management Corp. between 2005 and 2011. For this project we undertook 14 tasks including increased power production through efficient energy consumption and reducing greenhouse gases through new & renewable energy business. During 5 years, we acquired GHG registry credits of 3.55 million tons.

CDM (Clean Development Mechanism) Projects

The small hydroelectric power plant at the Gwangyang Works was registered as a Clean Development Mechanism (CDM) project by the United Nations Framework Convention on Climate Change (UNFCCC) in July 2008, securing 2,700 tons of carbon credits (CERs) over the next 10 years. In addition, the company carries out a forestation project in an area of 20,000ha in the East-Central region of Uruguay with a budget of USD 55 million. The first stage of the project was finished with the tree-planting in 1,000ha in 2009 and 2010. In December 2010, the project was registered as Korea’s first afforesta-tion and reforestation (A/R) CDM by the UNFCCC, from which POSCO will secure some 21,000 tons of emission rights per annum over the next 30 years. Currently, the second stage of the project is in progress.

Carbon Funds

POSCO is participating in the Future Carbon Fund, which buys carbon credits by investing in renew-able energy projects such as solar and wind power in Asian developing countries, and the Carbon Emission Fund organized by the Korean Ministry of Knowledge Economy.

Projects CO2 Reduction

Construction of a new combined-cycle power generation facility using Finex off-gas 486.0

Construction of a new cogeneration plant fueled by unused off-gas generated at the steelworks

1,501.9

Power generation project using waste heat from red-hot coke through the installation of 207.8 a coke dry quenching facility at Pohang Works

Installation of an energy-saving device at the ventilator of the power generation boiler 41.1

GHG (CO2) reduction through installation of 1 MW solar power system in Gwangyang Works 2.9

GHG (CO2) reduction through installation of 1 MW solar power system in Pohang Works 2.1

Installation of waste gas heat recovery & fuel preheating device at Pohang Hyeongsan power generation facility No. 11, which increased power generation and reduced GHG (CO2) emission 18.1

Installation of waste gas heat recovery & fuel preheating device at Pohang Hyeongsan power generation facility No. 12, which increased power generation and reduced GHG (CO2) emission 8.0

Reduction of fuel consumption through installation of boilers using waste gas from electric furnace 36.5

Electricity production through additional recovery of waste energy from blast furnace top gas 64.6 recovery turbines (TRTs)

Electricity production using waste heat generated from coke cooling at the CDQ facilities (Unit 3 & 4) 1,169.1

Reduction of power consumption through installation of pumps employing hydraulic coupling in 0.5 the hot rolling mill descaling system

CO2 reduction by switching auxiliary fuel for steam power generation boilers from 14.7 Bunker C fuel oil to LNG

Reduction of power consumption through installation of hydraulic coupling in the cooling water pump 0.5 at Gwangyang Works’ hot rolling mill No.2 and No.3

Total 3,553.8

Government-certified GHG Reduction Performance (accumulated between 2005~2011) (Unit: thousands of CO2 tons)

Carbon Market Carbon Market

INTRO > GREEN

STEEL > Green BuSIn


PARTNERSHIP

29

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

POSCO is committed to securing green businesses as its new growth driver. With the vision to leap forward as the Global Green Growth Leader together with POSCO subsidiaries and POSCO-invested companies, we are incorporating new green businesses such as energy, ICT and innovative new materials into our future-oriented business portfolio. The goal is to achieve KRW 10 trillion in revenues from green businesses by 2020. Our strategy to achieve the goal focuses on securing globally competitive core technologies that can tap into our subsidiaries’ and POSCO-invested companies’ competencies, establishing global partnerships to enhance green business competencies, and entering global markets. While securing alternative energy sources to prepare for the shift from fossil fuels to hydrogen energy, we are also pursuing the development of renewable energy businesses at the POSCO Family level in response to resource depletion and global warming.

● Solar Power Plant

In January 2012, POSCO Energy completed construction of a solar power plant in Sinan-gun, Jeol-lanamdo, which is known to have the longest peak sun hours in Korea. The Sinan Solar Power Plant with a 2MW capacity was built on a 30,000m2 salt pond that had been abandoned for years. The plant will produce 2,600MWh per year, enough to power 800 homes. Unlike other solar power plants that are normally built in farmlands or forests, the Sinan Solar Power Plant was built in an abandoned salt pond, minimizing environmental impact. Starting with the second 5MW solar power plant that broke ground in December 2012, POSCO Energy will construct a total of 12MW capacity solar power complex by 2014. POSCO Energy is also actively pursuing overseas businesses, including the 300 MW photovoltaic solar plant in Nevada, USA.

● Wind Turbines

POSCO E&C has operated a 40MW wind farm at Mt. Taegi, Gangwondo since 2008. Annual electricity output stands at 83,000 MWh, which is sufficient to power 15,000 homes. Operating the wind farm is expected to reduce 60,000 tons of CO2 emissions a year. In 2011, POSCO Energy entered an agreement with Doosan Heavy Industries and Construction to build an offshore wind power generation farm in Jejudo. The 30MW wind power plant will be the first of its capacity to be built in Korea and will be operated by POSCO Energy after completion. When this plant becomes operational it will produce 82GWh of electricity, enough to power 27,000 homes for a year. In December 2012, POSCO Energy signed a business agreement in with Jeonnam Wind Power Association to jointly undertake a pilot project, building a land wind turbine with 5GW capacity.


reneWable enerGydevelopMentWith poSCo FaMily

CoreSteelmaking, raw materials,logistics, materials, support

GrowthE&C, ICT, energy, chemical

supply steel expand steel demand

PosCo Family Green Business Vision 2020

Secure future-oriented businesses

SeedFinancial, green, marine, synergy businesses

Future growth engines

Sub-core businesses

Bases for value creation

INTRO > GREEN

STEEL > Green BuSIn


PARTNERSHIP

30

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

● Refuse-derived Fuel Project

Two of POSCO Family’s most important projects to turn waste to energy are refuse-derived fuel (RDF) facilities and sewage sludge plant. Refuse-derived fuel (RDF) facilities turn municipal solid waste (MSW) into fuel that can generate electricity. In 2010, the groundbreaking ceremony was held for Korea’s first RDF process and RDF-fired power generation facility in Busan, and a similar project is currently under way in Pohang. Once complete, the Busan plant will process 900 tons of MSW collected from Busan City, to produce 500 tons of RDF per day. The RDF-fired power plant is capable of generating 25MW of power per hour.

In February 2012, POSCO signed a concession agreement with Seoul City on the district heating business using sewage heat. The facility that is to be located inside Tancheon Water Treatment Center will generate heating energy using the difference in temperature of effluence discharged by the sewage treatment center. It will produce 200,000Gcal of heat that is an amount able to be used by about 20,000 households for a year. Seoul City expects a CO2 emission reduction of 32,000 tons a year, while Korea District Heating Corp. will be able to save on facilities investment and LNG costs by securing a reserve heat source.

● Fuel Cells

In January 2012, POSCO Energy installed 100kW fuel cells for buildings, an urban-type green energy, at the Seoul Seobuk Hospital and Seoul Children’s Grand Park. It supplies approximately 10% of the energy needed at the hospital and children’s park. The fuel cell for buildings in which KRW 8 billion was invested and took over a year to develop is the first 100kW fuel cell product in Korea, and produces 100kW of electricity and 46Mcal of heat per hour.

In September 2012, POSCO Energy held the groundbreaking ceremony of the fuel cell power plant at a recreation complex in Ancol, Indonesia, marking the first overseas construction of its fuel cell power plant. With a capacity of 300kW, it will supply 2,365MWh of electricity which can be used by 1,000 homes. As the fuel cell power plant generates no noise or air pollutants, 320 tons of GHGs will be reduced, and the project is expected to serve as a model of eco-friendly facility in Indonesia, whose GHG emissions increase rate is the second fastest in the world.

Meanwhile, in November 2012, POSCO Energy entered into an agreement with Fuel Cell Energy for the transfer of cell production technology, which is the key component of a fuel cell. With this agreement, POSCO Energy will be able to realize technological independence 5 years after it launched its fuel cell business, which is a highly efficient and eco-friendly power generation business. With this contract POSCO Energy will secure the original technology for fuel cell power generation, and will complete the cell factory of about 20,826m2 is size at its fuel cell plant complex in Pohang by the first half of 2015, where it will begin producing 70MW cells.

● High-speed lithium extraction Technology

In February 2012, POSCO developed the technology for direct lithium extraction without evaporation, for the first time in the world. This technology uses the method of extracting lithium by causing chemical reaction in salt water. The extraction period for the conventional method takes about 12 months, whereas the newly developed technology shortens this process to less than a month. A small amount of lithium can be extracted even in 8 hours. The lithium recovery rate also rose from 50 percent to more than 80 percent. Lithium is a core material used in manufacturing batteries for electric vehicles and mobile devices, and most lithium is dissolved in salt water in high concentrations. Salt water with high lithium content exists only in some countries including Chile, Argentina, Bolivia and China. In March 2012, POSCO signed a heads of agreement for the joint venture in the lithium battery business with a state-owned Bolivian corporation, together with Korea Resources Corporation (KORES). Bolivia will supply materials for the lithium battery such as lithium, nickel and manganese while POSCO and KORES will provide related production technologies, with the goal of beginning manufacture by 2014.

Bird’s-eye view of Tancheon Water Treatment Center

Fuel cell installed at Seoul Children’s Grand Park

Bird’s-eye view of fuel cell power plant in Jakarta, Indonesia

INTRO > GREEN

STEEL > Green BuSIn


PARTNERSHIP

31

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

ProCess oF CreatinG slaG marine Forest

1 2 3 4

● Slag Sea Forest

POSCO signed an MOU with the Korean Ministry of Food, Agriculture, Forestry and Fisheries to respond to changes in the ocean climate in 2007, and another to develop sea forests and cultivate marine resources in 2010. Under these MOUs, POSCO will develop sea forests in 17 locations in an area of 51ha (effective are 816ha) using steel slag. The project will use the “Triton”1) brand artificial reef in restoring areas hit by bleaching events caused by the rising sea temperature. Triton is a quick way to restore marine ecosystems and resources including algae and shellfish. The main material for Triton is steel slag, a steelmaking byproduct containing more calcium and ionized iron than ordinary aggregate. The presence of these minerals stimulates the growth and photosynthesis of algae, and purifies contaminated seawater and sediment. In addition, Triton’s sea forest is capable of CO2 fixation from carbonization and seaweed photosynthesis.

After completing the Geomundo slag sea forest off the shores of Yeosu Expo Park in 2011 covering 1ha, POSCO is participating in a joint project to build a sea forest in Saryang Island and Uljin-gun. At Yeosu Expo’s POSCO Pavilion, we displayed a sculpture in the form of the Triton sea forest. Through the documentary on sea forests that was played at the Pavilion, we promoted the merits of POSCO’s Triton sea forest. In the years to come, we will take part in international cooperation project for marine ecosystems, including the revitalization of the coral reefs in Indonesia.

Sculpture in the form of the Triton sea forest

at the POSCO Pavilion, Yeosu Expo

Z o o m

Triton sea forest off the shores of Yeosu ExpoThe Yeosu Expo Triton sea forest was built in an area of 1.4ha, 8~13m deep in the community fishing ground of Deokchon Village in Geomundo. A total of 510 units of artificial reefs and 1,000 tons of steel slag were used. The artificial reef was made from steel slag aggregate and blast furnace slag cement, and was designed to maximize the surface for algae attachment and in consideration of the fish habitat. At the sea forest ecosystem survey conducted in April 2012, the algae habitat density excluding gulfweed was 4kg/m2, which exceeded our target of 2kg/m2. Moreover, algae such as ecklonia cava, gulfweed and sea staghorn were found, showing high species diversity, and the reef coverage rate was over 90 percent.

90%Coverage rate

4kg/m2

Habitat density

Achieved

Install structures that mitigate the impact of sea waves (Tetrapod)

Install artificial reefs(Triton Reef, Fertilizer)

Form a marine forest as a habitat for fish

Strengthen soft deposits such as sand and clay using Triton aggregate (10mm or smaller for log-soil purification, 10-7mm for soil consolidation and 300-600mm for marine plants) and supply iron.

Enhance the stability of the structures by further reinforcing the weak ground and supply iron, facilitating the attachment and growth of marine plants.

Triton concrete structures made of a mix-ture of Triton aggregate and slag cement in diverse shapes and sizes depending on the purpose

Triton concrete promotes marine plant at-tachment and growth better than conven-tional concrete does, and is widely used in marine farm and artificial reef projects

Fortify soft ground

Over

1) Triton is a Greek god of the sea. According to Greek mythology, he blew on his trumpet shell to summon fish and dolphins and restored damaged marine forests. It is also the brand name of POSCO’s low-carbon artificial reef made from steel slag.

INTRO > GREEN

STEEL > Green BuSIn


PARTNERSHIP

32

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Green lIfe

My life changed significantly after I began to actively participate in the Green Walk campaign. I now have more interest in nature and became a fervent advoca-tor of energy conservation. Although I am retired now, I am happy that I am thinking of ways to save the planet together with the POSCO Family.

Kim, Nam-ki | Retiree from SNNC (Best Participant in the Green Walk campaign)

are taking part in the Green Walk campaign

POSCO’s Green Walk campaign is a green life movement that

promotes reducing energy consumption and CO2 emission in

everyday life. POSCO Family employees and their family members

have been participating actively since 2011. The scope of the campaign

was expanded to major partner companies and suppliers in 2012.

Currently, 9,081 families who have signed on are practicing green

action and their love for Earth in their work and lives.

9,081families

Carbon report 2013

naviGation Menu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

POSCO Carbon-neutral Program

The POSCO Carbon-neutral Program was launched in 2009 as a program that supports diverse GHG emission reduction projects conducted by people throughout society including students, civic organizations and housewives. Since 2010, the program is run mostly for university students. Participants come up with ideas to offset carbon emissions and compete for program sponsorship. We select ideas that are creative and doable and provide financial assistance for up to a year. This program was designed to encourage people to adopt a carbon-neutral lifestyle and raise public awareness, bringing corporations and society together to build a green society. In 2012, the Carbon-neutral Program opened again for the fourth year. Unlike previous years where people participated in teams with their respective projects, this time we invited individuals to submit ideas for events that could stir up a buzz. The selected students were divided into 6 teams for their activities. University students from around the country teamed up and proceeded with their projects to “spread carbon-neutral awareness at the campus,” “hand-me-down reference books for senior high school students – the reference book vending machine,” and “POSCO Eco Village (a place for the eco-friendly/carbon-neutral experience).” The reporters who were selected among the participants write about carbon-neutrality from diverse perspectives. The activities of the Carbon-neutral Program are introduced at the official blog (http://blog.naver.com/carbonzero) and facebook page (www.facebook.com/PoscoCarbonzero), where you can also share opinions and knowledge about carbon-neutrality.

Green CoMMunity

Fourth Carbon-neutral Program poster

http://blog.naver.com/carbonzero

Green CoMMunity

•Jin-a Seo (Team 1, Keimyung Univ.)•Dong-hyeon Choi (Team 2, UNIST)• Jae-hui Myeong (Team 3, Korea Univ. of

Technology & Education)

MAGAZINe CONTRIBUTING eDITORS

•Jin-ho Kim (Team 4, Incheon Univ.)•Myeong-jun Lee (Team 5, Korea Univ.)•Hyo-jeong Kim (Team 6, Kyung Hee Univ.)•Se-hui Park (Team 6, Konkuk Univ.)

Team No. Members Major Projects

FOURTH CARBON-NeUTRAl PROGRAM TeAM’S ACTIVITIeS

1st Stage Project(Spread carbon-neutral awareness at the campus)

2nd Stage Project(Reference book vending machine)

3rd Stage Project(POSCO Eco Village)

Dong-wu Kim, Tae-gi Kim, Jin-a Seo, Ho-geon Seo, Eon-seung Lee

1

2

3

4

5

6

Making tin candles

Donation to 'Beautiful Store'

Ran POSCOFFEE

Operated bike generators

Eco-friendly Valentine’s Day

Carbon-neutral stair decorating

Making eco-friendly bracelets and hand warmers

Getting people to sign the action pledge

Mentor/mentee activities

Book donation buffet

Leave your carbon footprint

Making carbon-neutral foods, Making carbon-neutral chocolates

Making a pledge for carbon-neutrality

Love for nature postcard-writing

Making scrap paper note-books

Jong-hwa Park, Bo-mi Jeon, Su-hui Jeon, Seong-hui Jeon, Dong-hyeon Choi

Ji-yeon Kim, Jae-hui Myeong, Yu-jeong Lee, Sam-gi Jeon, Hyeon-su Jeong

Jin-ho Kim, Hae-ni Lee, So-yeong Jang, Hye-jeong Cheon

Du-min Park, Ji-hyeon Park, Jeong-eun Baek, Myeong-jun Lee

Song-rim Kim, Hyo-jeong Kim, Gyeong-yong Mun, Se-hui Park, Se-jin Cha

INTRO > GREEN

STEEL > GREEN BUSIN

ESS > Green lIfe > GREEN

PARTNERSHIP

34

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Z o o m

Major Projects of the Fourth Carbon-neutral Program

Spread Carbon-neutral Awareness at the CampusThe fourth Carbon-neutral program participants divided into 6 teams and proceeded with their unique ideas to spread carbon-neutral awareness at the campus, which was the mission of the 1st stage project. They made tin candles and notebooks out of discarded tin cans and scrap paper, and made eco-friendly vegetable rice balls, demonstrating carbon-neutrality through their own actions. With the participation of campus friends, they made a carbon footprint tree by stamping their footprint on a large piece of paper. Other activities include making a pledge tree with carbon-neutrality pledges and writing out love for nature postcards.

Hand-me-down Reference Books for Senior High School Students: The Reference Book Vending MachineThe second stage project of the fourth Carbon-neutral Program participants was to gather reference books from students who have taken their university entrance exams and give them to high school students going on their senior year. A large manually operated vending machine was put up at crowded downtown areas (Seoul Hongdae Playground, Nowon Culture Street, and Siji Square in Daegu). When people put the reference books they brought with them into the vending machine, the person inside would hand them out souvenirs. It was a fun and interesting event. The 1,500 or so reference books thus collected were donated to used bookstores, youth centers and volunteer organizations. Program participants met the students receiving the donated reference books in person to explain about the carbon-neutral program and raise environment awareness, while also providing mentoring on their studies. It was a meaningful project through which some KRW 6 million was saved, and many citizens joined together to participate.

POSCO Eco Village (a place for the eco-friendly/carbon-neutral experience)The last stage project of the Carbon-neutral Program was the POSCO Eco Village. It was an event designed to inform many people about carbon-neutrality under 5 themes taken from the various environment-related activities. At the “Low Carbon Energy Village” visitors could experience making electricity by stepping on the bicycle pedal, reminding them of the value of electricity. Meanwhile, at the “Low Carbon Recycling Village” participating citizens made hand warmers using old clothes and whole wheat, and they could also design and make bracelets using used leather. The “Low Carbon Chocolate Village” offered a program making chocolates on the occasion of St. Valentine’s Day, while at the carbon-neutral coffee shop POSCOFFEE, coffee made from coffee beans that visitors ground themselves and environmentally friendly tea was served in tumblers instead of disposable cups. At the exit of the POSCO Eco Village, participants wrote out their pledge to practice carbon-neutral living on a leaf and put it up on the wall, completing their pledge to love Earth just a little more.

proJeCt 1

MAKING CANDLES WITH DISCARDED TIN CANS CARBON-NEUTRALITY PLEDGE TREE

REFERENCE BOOK VENDING MACHINEREFERENCE BOOK VENDING MACHINE

proJeCt 2

proJeCt 3

GROUP PHOTO OF THE 3RD STAGE PROJECT

INTRO > GREEN

STEEL > GREEN BUSIN


PARTNERSHIP

35

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

POSCO Family Green Walk Campaign

POSCO has launched a Green Walk campaign to bring employees and their family members together in pursuit of a greener world. This enterprise-wide program encourages employees to adopt a greener lifestyle that helps to reduce energy consumption and lower GHG emissions. The campaign suggests that employees and their family members engage in the four energy-saving actions (Walk, Turn Off, Reduce and Recycle). Employees who voluntarily conduct “green” activities with their families can share what they did with other employees by posting photos and essays on the Green Walk homepage. The page also provides various contents such as environmental news, expert op-ed., and diverse online events, encouraging people of different ages to participate in “green activities.” Employees and family members who subscribe to the page are given “green coins” depending on their activities, which can be used to recharge transportation cards, purchase green book, or donate for people vulnerable to climate change. The campaign was launched in 2011 in collaboration with local civic organizations. Some 9,081 families in 41 member companies of the POSCO Family are participating in the campaign as of December 31, 2012, and it will continue in 2013 with a variety of events and activities with the participation of 10,000 families.

Green WorkplaCe

Green Steelworks

The Gwangyang and Pohang Works are strengthening employees’ eco-friendly activities through campaigns such as commuting by bicycles and operating circulator vans within the Works. Pohang Works designated every Monday as “take the bike to work day” since April 2012 and purchased over 4,000 bicycles to encourage bicycle commuting, while building 3 bicycle routes connecting Pohang Works with residential areas where most workers live, with the aid of Pohang City. In addition, the gateway electronic tag system, bicycle repair center, bicycle routes, road signs, and bicycle stands were installed within the Works. To encourage employees’ bicycle commuting, a mileage system was introduced where employees get 10 points when commuting by bicycle, which has priority when buying tickets for in-company concerts, using the sports facilities and recreational facilities. As more employees used the bicycle or company bus to go to work, the circulator vans became more popular

<Green 100 Book> publiShed in 2013This book introduces the stories of people who par-

ticipated in the POSCO Family’s Green Walk campaign

in 2012. The 100 stories featured include diverse

frank opinions on environmental issues, columns and

interview of external experts who joined forces in the

Green Walk campaign, and the performance of vari-

ous activities for low-carbon, green growth.

Detailed introduction of the POSCO Family’s Green

Walk activities is available on the following page:

www.greenwalk.co.kr m.greenwalk.co.kr

poSCo FaMily GreenWalkThe logo in shapes of a road and green leaves ex-

presses POSCO’s hope that the Green Walk activities

would protect the earth’s beautiful nature.

Green WorkplaCe

the Four Green aCtions oF the Green Walk CamPaiGn

1 Walk

3 reduCe

2 turn oFF

4 reCyCle

CO2 reduction activity-13g Use the stairs when going up 4 stories or less

-2.3kg Walk or ride a bicycle to go to a nearby place

-7kg Use public transportation for 30 minutes a day

-7kg Use car pools

CO2 reduction activity-54g Switch off lights and computers at lunchtime or

on leaving the office

-126g Turn off the engine when idling for more than 3 minutes

-15g Switch off multitaps when leaving for more than one hour

-13g Turn off lights near windows

CO2 reduction activity-19g Reduce water usage by one minute

-7g Refrain from using disposable cups and paper towels

-17g Don’t leave leftovers

-260g Adjust targeted temperature by 1 degree

CO2 reduction activity-3g Reuse scrap paper

-19kg Collect and donate unused clothes

- Think of ideas for environmental protection

- Separate paper, plastics and other recyclable items from the garbage

INTRO > GREEN

STEEL > GREEN BUSIN


PARTNERSHIP

36

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

m.greenwalk.co.kr

Z o o m

POSCO Engineering | GHG reduction achieved through one meal a day at the company lunchroomPOSCO Engineering provides a low-carbon menu at the lunchroom to reduce carbon footprint and food wastes. The menu consists mainly of vegetables that have low carbon output, uses the minimum amount of oil, gas, and heat to minimize carbon generation. Food ingredients that are produced within the local region and that are in season are chosen to shorten the transportation distance. In order to reduce food wastes, the company analyzed the reasons behind food wastes, encouraged employees to take appropriate portions, and made sure no food was discarded unnecessarily. As a result of these activities, the average amount of food waste decreased by 1,364kg per month, which has the effect of reducing 2,250kg of greenhouse gases.

POSCO C&C | Campaign to Internalize Green LivingIn addition to the Green Walk campaign activities such as saving energy and recycling unused clothes and paper, POSCO C&C is implementing various activities to internalize a green living. It promoted bicycle riding by supporting in-company hobby clubs, undertook environmental cleanup volunteer work at the company and group level, and ran the health enhancement program through campaigns to quit smoking and eating less salt. POSCO C&C applied for a Green Company by the Ministry of Environment, for contributing significantly to improving the environment by mitigating pollution, saving resources and energy, and improving products’ environmental performance. POSCO C&C is sharing its achievements with other companies as well.

POSCO Energy | Green Innovation CampaignPOSCO Energy is conducting various campaigns to realize its core value, green innovation. Through the “I am Green Creator” campaign, each individual makes an action pledge. The pledge is made in connection with the Green Walk campaign that promotes “throw away,” “reduce,” “turn off” and “share.” As part of the program, campaigns including No Leftover Wednesdays, Basket Sharing, and Green Touch were conducted. No Leftover Wednesday is designated once a month. Over 80 percent of the employees participated in reducing food wastes, which resulted in an average decrease per capita by 9g. At the Incheon headquarters building, Miraegwan, the “Basket Sharing” program was introduced. According to this program, we reduced the number of trash cans from 80 to 20 as a means to decrease the amount trash by sharing the trash cans. Meanwhile, the Green Touch campaign encouraged employees to set their PCs to switch to maximum energy-saving mode when leaving their desk for more than 30 minutes to attend a meeting, which increased energy efficiency at the offices.

Green Walk Activities of POSCO Family Companies

as well. There is a circular van system named 8282 that employees can use when they have to move within Gwangyang Works and Pohang Works, which is 3 times and 5 times bigger than Yeouido (which is 8.4 km2) respectively. The Gwangyang Works’ 8282 service started with just one van in 1999. However, with so many employees using the service, it has been expanded to 9 more vehicles, each running 45 times a day, transporting an average 1,200 employees every month.

energy-saving and Power-saving Activity

With prolonged difficulties in securing a stable power supply, POSCO is implementing various energy conservation measures to heighten employees’ energy awareness and comply with the government’s policies. Pohang Works launched the Power-saving Task Force to expand installation of the inverter, while adjusting production control scheduling to minimize energy costs in the short term. Through the production scheduling adjustment, POSCO has improved the efficiency of its generation facilities, saving KRW 5 billion annually by using night-time electricity which is cheaper. POSCO will continue to lower electricity costs through advancements in off-gas fueled power generation technology, and expansion of the Smart Industry system. At Gwangyang Works, shop floor units are taking active measures to save energy by adjusting the roll changing time and increasing LNG generation output. An energy-saving task force was put together where all production units participate to save electric-ity, fuel and water. At POSCO Center, energy saving activities are steadily being implemented, such as modifying the gray water facility, installing a boiler waste heat recovery facility, and setting up an energy patrol team.

Videoconference System

POSCO expanded its videoconference system to help reduce CO2 emissions by cutting the amount of business travel by employees between worksites in Pohang, Gwangyang, Seoul and other areas, while promoting communication between the offices. The company is currently building a network that links domestic worksites and POSCO Group affiliates and well as overseas POSCO offices in more than ten countries, including China, Japan, India, and Mexico. The videoconference system runs in individual PCs as well, enhancing operational efficiency as well as reducing GHG emissions.

INTRO > GREEN

STEEL > GREEN BUSIN


PARTNERSHIP

37

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

POSCO was the only steelmaker in the world to be selected in the Carbon Disclosure Leadership Index for the transparent disclosure of its carbon information in governance, risks & opportunities, strategies, GHG emissions and communication. We will continue to fulfill our obligations to build a green economy while cooperating closely with our stakeholders based on trust, in order to achieve actual reduction of GHG emissions. We hope for your interest andsupport in our efforts to protect the environment while enhancing the future competitiveness of the steel industry.

Manager Han, Sung-hee | POSCO Environment & Energy Department

top 10% in the Carbon disclosure scores, included in the Cdli

At the carbon disclosure evaluation conducted by CDP, a

renowned climate change disclosure organization, POSCO

was included in the Global 500 CDLI (Carbon Disclosure

Leadership Index) 2012, which only selects those top 10%

companies among the global 500 leading corporations. Being

the only steelmaker in the world to be included in the index, it

is recognition of our efforts to disclose our carbon information

in a transparent manner.

10%

Green PartnerShIP

Carbon report 2013

naviGation Menu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Carbon Disclosure

POSCO discloses its efforts to deal with climate change and its CO2 emission levels through the annual Sustainability Report and Carbon Report, as well as on its official website. Moreover, we have been participating in the Dow Jones Sustainability Index (DJSI) and the Carbon Disclosure Project since 2003, having our climate change response activities be evaluated by independent parties.

The Dow Jones Sustainability Index, organized by Switzerland-based sustainable fund manager SAM, lists some 300 global companies whose sustainability management performances are among the top 10%. POSCO has been listed on the Index for eight consecutive years since 2005. In 2010, we were the only steelmaker in the world to be named among the top performers on the Carbon Disclosure Leadership Index (CDLI) and Carbon Performance Leadership Index (CPLI) reports. The report covers 500 companies listed on the Financial Times Stock Exchange and evaluates their carbon disclosure and performance. POSCO was included in the index once again in 2012. POSCO has also been named as a leader in the raw materials sector by the Carbon Disclosure Project (CDP) Korea Committee since 2009. In the 2011 Environmental Tracking (ET) Carbon Ranking of the Environmental Investment Organization (EIO), a UK-based non-profit think tank, POSCO was placed highest among the Korean companies in terms of the transparency and verifiability of CO2 emission information and was the only Asia-Pacific company in the top ten.

In January 2011, the government opened a system that enables stock exchange-listed companies to voluntarily disclose their environmental management information. Accordingly, POSCO voluntarily disclosed being named as a leader in the Carbon Disclosure Project on September 19, 2012, and the company’s Sustainability Report on September 27, 2012.

doMeStiC & ForeiGn Cooperation Green partnerShip

Title Included in the Carbon Disclosure Leadership Index at the 2012 Global Carbon Disclosure Project

Details POSCO was the only steelmaker in the world to be named in the CDLI, and partook as a Korean Working Group company at the Climate Disclosure Standards Board (since July 2012), providing stakeholders with information on the risks and opportunities related to climate change that the company is facing.

Decision(verification) date September 12, 2012

This information is made public in voluntary disclosure in accordance with the Environmental Information Disclosure system commenced on January 1, 2011.

Other matters to consider when making investment decisions

Other Public Announcement Pertaining to Green Management Information (Voluntary disclosure)

Title Sustainability Report

Details The company disclosed its sustainability management performance focusing on 7 subjects: 1. Publication of the Sustainability Report, 2. Environmental management performance, 3. Activities for mutual growth, 4. Enhancing employees’ quality of life, 5. Increasing customer value, 6. POSCO’s role as a corporate citizen, and 7. Shareholders and investors.

Decision(verification) date September 27, 2012

This information is made public in voluntary disclosure in accordance with the Environmental Information Disclosure system commenced on January 1, 2011

Other matters to consider when making investment decisions

Other Public Announcement Pertaining to Green Management Information (Voluntary disclosure)

INTRO > GREEN

STEEL > GREEN BUSIN

ESS > GREEN LIFE > Green

PartnerShIP

39

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

1) ISO TC17/WG21, 「Calculation method of CO2 emission intensity from Iron and Steel production — Part 1: Steel plant with blast furnace (ISO/CD 14404-1)」 and 「Calculation method of CO2 emission intensity from iron and steel production -- Part 2: Steel plant with EAF (ISO/CD 14404-2)」

2012-2013 Climate Action Logo

2) Six Working Groups: Power; Steel; Cement; Combined Heat and Power (CHP) and Ef-ficient District Heating and Cooling (DHC); Cool Roofs and Pavements; and Energy Management

* ISO 50001, GSEP etc.

Climate Action by the World Steel Association

POSCO is cooperating with the World Steel Association (worldsteel) in its diverse initiatives to respond to climate change. In particular, POSCO has participated in the worldsteel CO2 Breakthrough Program that was launched in 2003 to develop breakthrough technologies to reduce CO2 emissions in the steel industry. In April 2012, the 12th Expert meeting convened in Metz, France, where POSCO introduced its R&D projects for CO2 capture technology and iron-and steel making using hydrogen, and discussed possibilities for future cooperation.

In addition, POSCO has participated in worldsteel’s Climate Change Policy Group and worldsteel CO2 Data Collection Project, ever since the two initiatives were launched in 2007 and 2009, respectively. The goal of these initiatives is to develop a GHG emission data collection methodology that can determine the GHG emissions of the steelmaking process, and collect & analyze the data. As the CO2 emission intensity calculation method provides a means of benchmarking carbon efficiency, worldsteel is moving to make this methodology to be adopted by ISO1). Experts from POSCO are participating for this process and the ISO methodology is expected to be officially approved in 2013. Thanks to our contribution to worldsteel’s endeavors to seek practical response to climate change, POSCO has been certified as a Worldsteel Climate Action Member for four consecutive years, ever since 2008 when the certification program was initiated.

Global Partnership on energy efficiency

At the Clean Energy Ministerial (CEM) meeting in July 2010, government and corporate leaders announced the Global Superior Energy Performance Partnership (GSEP). The purpose of this initiative is to enhance energy security by reducing energy consumption at industrial facilities and commercial buildings, thereby reducing GHG emissions. Within GSEP, there are six Working Groups2) including power and cement, and POSCO is participating in the Steel Working Group. POSCO attended the workshop held in Tokyo in March 2012 to discuss the Working Group activities and plans.

energy Management Forum

In July 2012, the Ministry of Knowledge Economy launched the Energy Management Forum to find ways to participate in the GSEP more effectively and establish mid-to long-term energy efficiency improvement strategies. The Forum consists of 50 experts from the industrial, academic and R&D sectors and is divided into 4 subcommittees. POSCO participates in three of those subcommittees and was the first Asian steelmaker to implement ISO 50001, and is now planning to expand it to the POSCO Family and other companies.

Goals of the GSeP Steel Working Group

1 Develop and implement energy management system for steelworks.

2 Develop and implement methodology to use, improve, and verify performance indexes.

3 Identify and disseminate technologies, including technologies that can be commercialized for

reducing CO2 emissions from iron-and steel making through energy saving and other breakthroughs.

4 Disseminate information on: the steelmaking industry’s burden on the environment and facilitation of resource recycling

5 Exchange information on financial support for carbon policy and technology dissemination of the steelmaking industry

Four Subcommittees of the energy Management Forum

Find ways to implement and enhance energy efficiency improvement systems*; find ways for international cooperation and to respond to global efficiency regulations; provide assistance and incentives to the public sector

Share the present condition of the energy management consulting sector; find ways to cultivate new businesses and expand over-seas markets for companies with expertise in the field

1 Subcommittee (policy/system) 2 Subcommittee (Cultivation of new businesses) 3 Subcommittee

(Dissemination in the industrial sector) 4 Subcommittee (Human resources cultivation)

Find example cases of implementing the energy management system in the industrial sector and ways to disseminate the example; establish methodology for assessing/verifying energy management performances; find how to induce cooperation among corporations

Find ways to cultivate experts who will disseminate the energy management system and improve energy efficiency at the industries; find ways to nurture new experts who will lead the future

INTRO > GREEN

STEEL > GREEN BUSIN


PartnerShIP

40

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Steel Industry Climate Change Response Team and GHG & energy Reduction Research Group

The Steelmaking Sector Climate Change Response Team, an industry-government-academia-research cooperative body, was launched in February 2005. The Ministry of Knowledge Economy, Korea Iron & Steel Association, POSCO and other Korean steelmakers are members. In 2012 the team hosted a visitation briefing to a steelmaking company to enhance the competencies in responding to climate change. Meanwhile, the Ministry of Knowledge Economy launched the GHG & Energy Reduction Research Group consisting of experts from the industrial, government and R&D sectors in order to support activities related to the GHG and Energy Target Management Scheme. POSCO is focusing on providing assistance in the fulfillment of reduction targets by sharing its reduction technologies and information, including research and surveys on GHG reduction technologies. In 2012 we introduced the technology of recovering waste heat from the steelmaking process and proposed methods to promote the waste heat recovery technology through policy.

Green Cooperation with International Organizations

POSCO signed an MOU with the Global Green Growth Institute (GGGI) in November 2011 for cooperation in promoting green growth and green businesses. Currently POSCO is conducting a feasibility study for the microgrid project in UAE, and plans to participate in the Indonesia project organized by GGGI.

The eighteenth Session of the Conference of the Parties

POSCO participates in the COP (Conference of the Parties), which is the highest decision-making body of the UNFCCC (UN Framework Convention on Climate Change). In November 2012, POSCO joined the delegates from the Korean industrial sector to attend the eighteenth session of the COP held in Doha, Qatar to understand the climate change policy direction after the Kyoto Protocol and the new climate regime. In addition, POSCO sponsored a side event that explains and discusses the position and present status of the industrial sector related to the Korean emissions trading scheme.

Support for Domestic Climate Change experts Forum and Publications

The POSCO Climate Change Forum is held every year, where climate change experts and scholars from Korea and abroad are invited. In 2012 we supported the Forum where experts from the government, industry, academia and research sectors participated, and the opinions gathered at the Forum were compiled into a specialized book to be used at the universities and graduate schools, titled “25 Experts’ Solutions for Climate Change.”

INTRO > GREEN

STEEL > GREEN BUSIN


PartnerShIP

41

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

The age of the green economy and the role of business corporations

Carbon dialoGue

Gee-woong Sung: Korea’s top environmen-tal opinion leaders have gathered here today. Thank you for attending POSCO’s colloquium amidst your busy schedules. Today’s discussion will be on “the age of the green economy and the role of business corporations.” The Rio+20 Conference will be held on 13~22 June to mark the 20th anniversary of the 1992 United Nations Conference on Environment and Development, in Rio de Janeiro. First, I would like to hear your thoughts on the significance of the Rio+20 Conference and the government’s direction.

Soo-gil Young: The theme of the Rio+20 Conference is “Green Economy.” At the Rio Summit 20 years ago, the world’s leaders agreed on the balanced development of the environ-ment, economy and society. But environmental conditions are still deteriorating. Although we desperately need a global approach to solving en-vironmental issues, developing countries such as Brazil and China are maintaining that the issue of fighting absolute poverty is more pressing, while industrialized countries are trying to demonstrate that the problems of poverty and environment can be solved at the same time. This is where “Green Economy” comes in. At the commemoration ceremony of the 60th anniversary of establish-ment of the Korean government, the government presented “Low-carbon, green growth” as the new paradigm for the nation’s development, and is implementing related policies. Green growth is indeed the best means of enabling a green econo-my, and we plan to induce cooperation toward this green growth at the Rio+20. We will bring about a global partnership for green growth, and discuss transforming the GGGI (Global Green Growth Insti-tute), in which the government is playing a leading role into an official international organization.

Sung-jin kang: Korea didn’t feel the pressure to reduce GHGs at the time of our rapid economic growth. The developing countries of today are feeling more environmental pressure in their path to economic development. Therefore I think our effort to diffuse our green growth knowledge is meaningful. People only think of climate change as the background for the discourse on green growth. But the bigger problem behind it is the depletion of fossil fuels. Whenever we talk about green growth, we hear that the issue of poverty has priority. Therefore I believe we should aim for an inclusive green growth that takes both economic and social issues into account, such as energy and poverty.

Sung: Economic and social changes have followed ever since the government’s low-carbon, green growth announcement. What are your thoughts on these changes?

Jin-taek Hwang: Last year, we achieved fantastic external growth. Compared to 2007, the renewable energy market grew six fold, employ-ment increased by 3.7 times, and corporate size doubled.

Il-chung kim: After a long study on the limits of the environment’s ability to sustain economic growth, “sustainable development” is mentioned in “Our common future.” I think it’s commendable that the government designated the environment as the national agenda, established green growth policies and is making efforts to diffuse those poli-cies throughout the world.

kang: There are some in the academic field that believe it is difficult to foresee economic growth in terms of green growth. But in the long term, as the industrial structure will shift, it will definitely help sustainable development.

Young: We should rethink of our viewing the goal of economic policies only in terms of growth rate. Assessing economic growth in consideration of human wellbeing and natural assets is the kind of green growth that Korea is aiming for. The government set a goal of expanding renewable energy by 12% by 2030. This is a number that even experts are not optimistic about. As for the part that is still insufficient, we will supplement with nuclear power, with thorough consideration for safety issues.

Sung: I think valuing environmental value depends on the awareness and practice of the members of society. What are your thoughts on the people’s change in awareness and their commitment toward green growth?

kim: The environmental awareness of the Korean people is quite high. This is from a dated survey, but the Korean people chose the environ-ment, the atmosphere in particular, as the most important challenge on the occasion of the new millennium. The separate waste disposal system, which is an advanced environmental policy, was widely accepted by the people. It is now reputed as a successful case. Regretfully, people’s awareness and practice is limited to those that are closely related to everyday life. Awareness on issues that are not directly related to their everyday life, such as climate change, is low, and the commitment level seems even lower. This is why we are in dire need of education and promotion. In the past NGOs actively conducted campaigns, but now it has slowed down considerably due to shrinking support funds. According to a recent study by a domestic economic research institute, most CEOs recognize that the environment is an important element in corporate management, but less than 10 percent actually develop and sell eco-friendly

Securing a dominant position in the green market is necessary, through the collective

wisdom of the government and corporations.

Soo-gil Young

We should aim for an inclusive growth that takes both environmental and

social issues into consideration.

Sung-jin Kang

POSCO actively pursues GHG emission reduction… It is a leading corporation in

the green growth sector.

Il-chung Kim

Green businesses such as renewable energy are long-term businesses on which

our future depends on.

Jin-taek Hwang

In order for us to move towards a green economy, along with the public and civil efforts, the role of the corporate sector is vital.

Gee-woong Sung

INTRO > GREEN

STEEL > GREEN BUSIN


PartnerShIP

42

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Young: Korea missed both the first indus-trial revolution led by coal-fueled steam and the second industrial revolution represented by oil and electricity. Now is the daybreak of the third industrial revolution led by renewable energy, and we cannot miss this. POSCO is a model corporation that is admired by the people. I hope POSCO will be the early mover in the third industrial revolution by having a global outlook and long-term vision, setting an example for green innovation.

kang: It is commendable that POSCO ranked 30th in the Davos Forum’s Global 100 Most Sustainable Corporations. Considering POSCO’s status, pursuing sustainable develop-ment and fulfilling its social responsibility is not incompatible with the duty to make a profit. I hope that POSCO will continue to have keen interest in its corporate social responsibility in an international aspect when investing in developing countries, as it has so far. It is a fact that large corporations have contributed significantly to the national economy. However, it is also true that most large corporations are responsible for GHG emissions from their heavy & chemical industries. Although POSCO, who already has a high energy efficiency level, does not have much room for further reductions, I hope they will continue their efforts.

kim: POSCO is devoted to reducing GHG emissions. I hope they will pay more attention to SMEs within the supply chain so that they can participate in the green growth transition as well. NGOs fill the gap that the government and businesses cannot. For example, an NGO’s activities to restore the river benefit the busi-ness by providing good quality industrial water. I hope POSCO will pay more attention to non-profit NGOs.

Hwang: Korea is the only country that is leapfrogging from a developing to industrial-ized country and receives much attention from around the world. They are particularly interested in Korea’s green growth policy. At the Seoul Meeting of the WBCSD which is to be held in October, discussions will take place on the subject of “Changing Pace,” a business and policy roadmap to 2050 towards a sustainable society. I hope to see active participation from POSCO, a member company with commend-able achievements.

products or implement GHG reduction mea-sures. This is another example that illustrates the gap between awareness and practice related to the environmental issue.

Hwang: In Europe, children are educated on the values of the environment. Thus the environment and ethics are internalized early in their life. In his book “Physics for Future Presi-dents,” Richard A. Muller named five topics that future leaders should understand: terrorism, energy, nukes, space and global warming. Among these, he mentions global warming as the most important. Before talking about people’s awareness, leaders in each sector should set out on a pilgrimage to find a solution to the environment and energy issue. Attempts to solve long-term tasks too quickly will lead to an unbalance between policy and practice. As green growth is a mission for humans, commu-nication and consensus among stakeholders is most important.

Young: At the survey conducted last January, 97 percent of the people said the next government should continue green growth poli-cies. The fact that the Framework Act on Low Carbon, Green Growth was passed unanimous-ly means there is support from the public. But Korea’s energy efficiency ranks in the lower half among the OECD members. Even when most of the people are for reducing GHGs, less than 10 percent of the people agree on increasing the price of electricity by 10 percent. I would like to compare Giddens’ Paradox, which describes the difficulty of taking real action in reducing GHGs to the “smoker’s paradox,” who knows it is harmful yet can’t quit.

Sung: Today’s theme is the age of the green economy and the role of business corporations. In order for us to shift to a green economy, the role of the business corpora-tions is important, along with the efforts of the public and civic sector. What are the expectations on corporations in the view of the government, civic groups and academia?

Young: The national GHG reduc-tion target that the President announced at the Conference of the Parties to the UNFCCC held in Copenhagen, Denmark in December 2009 brought a wave of green innovation throughout the industrial sector. Dozens of policies and related laws were established which opened a way to support and regulate corporations. Now is the time for corporations to take the leading role in the pursuit of green growth. We hope businesses will look at the policies prepared by the government with a positive eye, and that

Giddens’ ParadoxIn his book “The Third Way” Anthony Giddens states that the dangers posed by global warming aren’t tangible, immediate or visible in the course of day-to-day life, but waiting until they become visible and acute before taking action will be too late.

A colloquium under the theme “The age of the green economy and the role of business corporations” took place on May 30, 2012 at the POSCO Center. Opinion leaders in the environmental sector dis-cussed economic and social changes related to green growth, and the role of the business corporations in an age of the green economy.

they will cooperate with us through technology development for a green innovation. We will then be able to secure a dominant position in the new green business market.

kang: For the green economy to be sustainable the market mechanism should be operational while related policies provide sup-port. As for the corporations, emission trading should not be regarded merely as a regulation, but a means to meet GHG reduction obligations. In order for the emission trading scheme to be effective, a market mechanism which reflects the electricity price according to demand and supply should be in place.

kim: The role of a business is to maximize its value despite social restraints. Environmen-tal requirements are one of those restraints, and businesses should focus on developing green technologies, providing green products and services. The green economy will be successful when businesses accept environ-mental regulations as part of the paradigm, and transform it to ethical management.

Sung: Expectations on businesses are rising in the age of the green economy. As is with other sectors, global competition will rise as well. But it may be too heavy a burden for the businesses to carry alone. Mr. Hwang, what are some of the things that businesses are asking for?

Hwang: Green business is a long-term project. However, many nations have leaned on short-term capital such as venture capitals and are now facing a difficult situation. For ex-ample, there are talks on the sale of Vestas, the Denmark-based world’s largest wind turbine producer, as sales are slowing down. The green business market including renewable energy is volatile and unpredictable. In order to continue green growth despite these uncertainties, a convoy approach is preferable rather than a large corporation acting solo. In other words, instead of a large corporation going alone, the support of the government and trade associa-tion, and the contribution of strong SMEs (small and medium sized enterprises) is necessary. As businesses are making long-term investments in human resources cultivation and technology development, we need the government’s steady support. We hope for a detailed policy so that we can compete under equal circumstances in the global market.

Sung: Lastly, tell us about your impres-sion on POSCO and what you would like to see from us in the future.

▶ Panelists | Soo-gil Young Chairman of the Presidential Committee on Green Growth, Il-chung Kim joint chairman of Environmental Justice, professor of International Trade, Dongguk University, Sung-jin Kang professor of Economics, Korea University, Jin-taek Hwang secretary general of KBCSD, professor at Graduate School of Energy and Environment, Korea University.

▶ Presided over by | Gee-woong Sung head of POSCO Environment & Energy Planning Department

INTRO > GREEN

STEEL > GREEN BUSIN


PartnerShIP

43

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

The POSCO Family is working to strengthen their low-carbon, green growth capability to achieve the goals set in Vision

2020, enhance their competitiveness, and maximize synergy by not only strengthening its core businesses including

steel, stainless steel, specialty steel and materials, but also by identifying and cultivating emerging businesses and seed

businesses such as energy, chemicals and ICT. Currently major POSCO-invested companies* are 93 (24 in Korea and 69

overseas).

The diversification and globalization of the POSCO Family business portfolio has created the need for enterprise-wide

environmental management. The POSCO Family Global Environmental Management Declaration announced in December

2010 is a significant step toward our realizing such a system. Our efforts to expand and upgrade environmental manage-

ment to all the Family companies continued in 2012 as well. As a result, twenty-eight POSCO-invested companies and

overseas business sites acquired the ISO 14001 certification. In December, Pohang and Gwangyang Works acquired ISO

50001 certification for the first time in the Asian steel industry.

The Carbon Report 2012 introduces ten POSCO Family companies’ major activities to respond to climate change.

* Major POSCO-invested companies: based on the consolidated subsidiaries as listed in the 45th Annual Report

poSCo FaMily

● POSCO Specialty Steel ● POSCO C&C ● SNNC ● POSCO Plantec ● POSCO E&C

● POSCO Energy ● POSCO Chemtech ● POSCO AST ● POSTECH ● POS-HiMETAL

Carbon report 2013

naviGation Menu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

poSCo Specialty Steel

POSCO Specialty Steel, formerly Sammi Steel, was acquired by the POSCO Group in 1997. With an annual crude steel production capacity of 960,000 tons, the product portfolio includes stainless steel, machine tool steel, carbon & alloy steel, and specialty alloys. These cutting-edge industrial materials are used in the automobile, machinery, aviation, nuclear power, shipbuilding and electronic industries. In 2012, the company posted an operating profit of KRW 82.5 billion on revenues of KRW 1,405.7 billion, producing 684,000 tons of crude steel for the year. To grow into a green company with revenues of KRW 4 trillion by 2020, POSCO SS is installing eco-friendly electric furnaces, expanding the use of clean-burning fuels and building the green management system.

Climate Change Response Strategy

POSCO SS is reflecting the climate change risks and opportunities in the corporate strategy through a strategic carbon management enabled by its low-carbon specialty steel production processes. We will reduce power and fuel consumption and increase energy efficiency while investing KRW 50 billion in developing breakthrough technologies. We will also expand high-efficiency steel supply and turn steelmaking byproducts into resources to reduce 40,000 tons of CO2 per annum.

GHG emissions from Production Activities

The CO2 emission intensity per ton of steel increased by 18% to 0.898t-CO2/t-s in 2012 from 0.758-CO2/t-s in 2011.

Green Steel & Business

POSCO Specialty Steel has invested a total of KRW 30 billion on energy efficiency enhancement between 2001 and 2012. We are continuing our facilities investment to switch over to cleaner-burning LNG fuel to lower stationary combustion emissions. We installed high-efficiency burners at the rolling mills and forging process to improve energy efficiency, which enabled us to save 3,000 TOE of energy inputs. POSCO SS is developing materials for hydroelectric, wind, nuclear, tidal and fuel cell power generation systems as part of overall drive to reduce CO2 generation and to achieve low-carbon, green growth. At the same time, we are undertaking various activities to reduce GHGs in society such as using steelmaking byproducts to replace conventional materials in cement production.

POSCO SS also actively participated in the community’s green movement such as environmental cleanups in the Masan Bay, Jeongbyeong Mountain, Muhak Mountain and Jangbok Mountain. We also took part in the Green Walk campaign conducted at the POSCO Family level, which encourages employees and their family members to walk, turn off, reduce, and recycle. The company’s Green Life campaign is also in operation, which promotes turning off one lamp, observing interior temperature guidelines, zero-standby power and zero-leakage.

2010 2011 2012

Emission Intensity 0.750 0.758 0.898


45

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56


The UNFCCC (United Nations Framework Convention on Climate Change) and the Korean govern-ment’s Framework Act on Low Carbon, Green Growth have made efficient energy use, low-carbon green electricity production, and stable electricity supply the top priorities of the power generation industry. POSCO Energy believes these developments pose not only risks but also new business opportunities, and is adjusting business strategies accordingly. We are reducing GHG emissions by installing high-efficiency facilities, and cultivating the fuel cell and renewable energy businesses as our Sub-core business.


Virtually all (over 99%) of GHG emissions from POSCO Energy comes from burning fuel to generate electricity. Less than 1% is attributable to the actual use of electricity by power generation facilities. Our emission intensity decreased by about 1.2% in 2012 to 0.408tCO2/MWh from 0.413tCO2/MWh in 2011, thanks to investing in high-efficiency facilities and operation improvements.

Green energy & Business

POSCO Energy named renewable energy as its Sub-core business. By 2020, POSCO plans to construct and operate renewable energy power plants including solar, offshore wind and RDF, both domestically and abroad. As part of our plans for phased construction of a 35MW solar power generation complex in Sinan, Jeollanam-do, we completed the 1st phase construction – a 2MW solar power plant - in 2012, and we will build a 30MW offshore wind power plant in Jejudo by 2014. We are also actively pursuing environmental projects such as the resource circulation power plant that uses waste resources as fuel. The RDF power plant that uses municipal solid wastes to be completed by 2013 is part of this project. As for overseas business, we are proceeding with the construction of a 300MW solar power plant in Nevada, USA. We will continue to contribute to low-carbon, green growth by actively expanding renewable energy power generation facilities both in Korea and abroad. In addition, we are actively pursuing the fuel cell business that creates clean energy through the chemical reaction between hydrogen and oxygen. In 2011 we built a production plant for 100MW/yr fuel cells in Pohang, and supplied fuel cells to 20 locations nationally, which aggregates to 52MW. With the increasing demand for fuel cells, we are diversifying our fuel cell products to various capacities (2.8MW, 1.4MW 300kW) and purposes (buildings, ships, backup power).

poSCo energy

New headquarters building dubbed “Miraegwan”

POSCO Energy is a global integrated energy company spanning operations in four core businesses: power generation, renewable energy, fuel cells, and energy resources development. After renaming ourselves POSCO Energy in 2012, we are making big steps toward achieving our Vision 2020 of generating KRW 12 trillion in sales and becoming the “World Best Green Energy Company.” Tapping into 40 years’ experience in power generation, we will achieve this vision through business diversification of our energy business to off-gas, solar, wind and resources circulation, while expanding to overseas markets for the construction and operation of power plants, with focus on Southeast Asia and the Americas. In order to develop future energy that will be the engine for new growth, we established the Green Energy Research Center where we are focusing our competencies to develop innovative products and technology in the green business sector such as solar and wind energy, and energy storage facilities. In addition, we built the world’s largest fuel cell production complex, leading its commercialization through technology localization and development of next-generation technologies. We are developing power generation using recycled resources such as RDF (refuse derived fuel) and sewage sludge fuel as well.

* The 2009~2011 data were compiled in accordance with the GHG and Energy Target Management Scheme statement submitted to the government. (The data for 2012 were internally calculated and verification is scheduled.)

2010 2011 2012

Emission Intensity 0.490 0.413 0.408

(Unit : t-CO2 / MWh)

46

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56


“Green Growth through Production Technology Sophistication” is POSCO C&C’s new vision for growth. To realize this vision, we are participating in the enterprise-wide endeavors of the POSCO Family for green growth. Our initiatives for green growth aim to achieve low-carbon production capability by improving the efficiency of our energy facilities, developing environment-friendly products, and lowering the intensity of CO2 emissions. We plan to invest approximately KRW 9 billion by 2020 in assessing our energy facilities for higher energy efficiency, reducing our fuel consumption, transiting to high-efficiency production facilities, and developing innovative technologies to reduce CO2 emissions.


The primary products we produced in 2012 were zinc- and aluminum-alloy coated steel sheet and pre-painted steel sheet. Our CO2 emission intensity decreased by about 1.7% to 0.114t-CO2/t-s in 2012 from 0.116t-CO2/t-s in 2011.


POSCO C&C is steadily investing in better energy efficiency. We are recovering waste heat and enhancing the operational efficiency of motors. Conventional lighting systems are being replaced with high-efficiency lighting and we are remodeling the ceilings to let in more natural light. POSCO C&C is particularly committed to cutting CO2 emissions by adopting a CO2 capture system and fuel-cell generators. We are focusing R&D competencies on the development of new, eco-friendly profit sources to lay the foundation for green growth. The new products and business areas our R&D efforts are aimed at include materials used in printed circuit boards for LED lighting, green energy systems, installation of fuel cells for power generation, power generation using roof-top solar panels, and heating systems powered by eco-friendly energy sources, which will further strengthen the POSCO C&C’s business portfolio.

With the CEO’s commitment and employees’ participation toward green management, POSCO C&C put its efforts not only into the appropriate treatment of pollutants but also to preventive environmental management and improvement activities. In addition, we built the foundation to promote green management by introducing an input unit management system from raw materials to production. As a result, pollutant discharge decreased significantly, it brought energy conservation effects, and improved the products’ environmental performance.

poSCo C & CFounded in 1988, POSCO C&C specializes in developing and manufacturing galvanized, aluminized, and color steel for the automotive, home appliance, and construction industries. Annual production capacity today stands at one million tons. Our technological prowess, demonstrated by our development of aluminum-stainless steel sheets and aluminum sheet for fuel cells has enabled us to secure over 70 percent of the domestic market share. In 2012, POSCO C&C recorded annual revenue of KRW 853.5 billion. Our next target is KRW 4 trillion in revenues by 2020. To achieve this goal, we will broaden our business horizons to include the surface treatment of carbon steel products as well as non-carbon steel products such as aluminum and stainless steel materials, and materials for LED substrates.

2010 2011 2012

Direct emissions (Scope 1) 56,684 50,746 49,678

Indirect emissions (Scope 2) 46,844 48,968 49,773

Emission intensity (t-CO2 /t-s) 0.109 0.116 0.114

(Unit : t-CO2 )

47

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Established in 1963, POSCO Chemtech is a leader in refractory making, as well as furnace building and repair. The company has supplied various refractory materials and furnaces to POSCO and other steelmakers as well as to cement and glass makers. Export markets include Japan, China, Indonesia, and Australia. In 2012, POSCO Chemtech reported KRW 1,292.3 billion in annual revenues and KRW 93.4 billion in operating income, and has a revenue target of KRW 11 trillion in 2020 as part of POSCO’s Vision 2020. In order to achieve this goal, POSCO Chemtech is preparing for a leap forward as a manufacturer of general chemical materials by building upon its carbon materials business, coupled with its operation of the lime plant in Pohang and Gwangyang, and its Chemical Plant.


POSCO Chemtech is committed to making all business activities follow a low-carbon, green growth philosophy. Our priority is on maximizing energy efficiency and thereby minimizing our carbon foot-print. In addition to facility upgrades to raise energy efficiency, we will invest about KRW 10 billion in developing innovative CO2 reduction technologies. We will expand our energy efficiency improvement and byproduct reusing businesses to achieve our goal of reducing our annual CO2 emission volume by 38,000 tons by 2020. Adding to the ISO 14001 certification in 2011, we will introduce the carbon management system ISO 150001 to become the leader in the age of the green economy.


In 2012, the CO2 emission intensity at our lime calcining and refractory plants increased by about 3.4% to 0.91t-CO2/t-CaO, MgO in 2012 from 0.88t-CO2/t-CaO, MgO in 2011. The increase is due to the higher grade quicklime.

Green Refractories & Business

POSCO Chemtech signed a voluntary agreement with the government in 2000 regarding energy effi-ciency enhancement. During the agreement period, we reduced our electricity consumption by install-ing inverters, and invested in streamlining the operation of our firing furnaces and a waste recovery system. In 2012, we further reduced energy consumption and GHG emissions by utility improvement that decreased steam discharge, and exhaust duct system improvements by installing high-efficiency motors. A corporate culture campaign dubbed “I Green” was conducted, with the aim of fostering a green lifestyle that starts from “me.” Through the five action initiatives – walk, reduce, turn off, gather, observe – we achieved GHG reduction of about 600 tons and saved KRW 500 million in energy cost. At the Green Start Contest held in October 2012, POSCO C&C won the Minister of Environment’s award in recognition of its efforts to diffuse the green culture.

We plan to expand our business scope from refractory materials and environment-friendly segments to include lime and chemicals that turn primary fossil fuels into value-added products, focusing on reducing GHG emissions and improving energy efficiency. Other measures to reduce GHGs include the operation of waste refractory recycling plants to produce alternative fuel sources, and the production of light calcium carbonate from our byproducts.

poSCo Chemtech

Green Start Contest Awards Ceremony

2010 2011 2012

Direct emissions (Scope 1) 0.86 0.84 0.87

Indirect emissions (Scope 2) 0.04 0.04 0.04

Total 0.90 0.88 0.91

* The emission intensity figures differ from those presented in the previous year because production at the lime calcining process was not included when calculating the emission intensity.

(Unit : t-CO2 / t-CaO, MgO)

48

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

SNNC is a joint venture established in 2006 with SMSP, a New Caledonia-based nickel mining operation. Our core product is ferronickel, an essential raw material for stainless steel, and we operate the world’s largest-capacity electric furnace. Striving to become the Global No. 1 in ferronickel production technologies, we achieved KRW 379.2 billion in revenue and KRW 18.8 billion in operating income in 2012, while producing 21,000 tons of nickel (Ni). Plans call for the completion of a second production facility in 2014, bringing annual Ni production capacity to 54,000 tons.


SNNC is making diverse proactive responses to climate change and related international movements. Internally, we have established a Greenhouse Gas Committee to cut emissions, while externally we are actively participating in POSCO Family’s global environmental management to turn risks into new opportunities.

We secured global leadership by building an environmental management system guided by ISO 14001. We are transitioning to low-carbon FeNi production processes by developing technologies that enable efficient energy use and lower emission intensity, as well as alternative energy sources based on our low-carbon, green growth principle.

SNNC has established a mid to long-term strategy to reduce carbon emission intensity per ton of Ni ore usage by 12%, from BAU 0.73 t-CO2 /DMT to 0.64 t-CO2/DMT by 2020. To implement these plans, we have formed a task force responsible for GHG and energy issues and built a GHG and energy monitoring system in 2009. With a budget of KRW 16 billion, SNNC will develop innovative technologies to reduce CO2 emissions, improve energy efficiency, recycle slag into value-added products, and process low-grade nickel ore. These efforts will help make SNNC a global leader in low-carbon FeNi manufacturing.


The CO2 emission intensity per ton of FeNi decreased by 2.7% to 0.70t-CO2/DMT in 2012 from 0.72t-CO2/DMT in 2011.

Green FerroNickel & Business

SNNC will continue to reduce power consumption and the CO2 emission intensity of coal by developing technologies that will increase process heat efficiency, and technology that uses waste heat and combustion air to dry ores and coal. SNNC will reduce CO2 emission by developing wood chips as alternative fuel, and Mg Cored Wire that is a more environment-friendly desulphurizer than the conventional CaC2.

In response to the national power shortage, we will incrementally switch our factory lighting to LED, install moderate-and low-temperature waste heat generators, and build the Smart Industry system in connection to the government-led Smart Grid project. The Smart Industry system provides a visual representation of the energy flow within the production plant, which will enable us to develop a conservation solution, greatly reducing energy consumption, making us a leader in the energy conservation and eco-friendly green management movement.

SnnC

2010 2011 2012



Total 0.73 0.72 0.70

(Unit : t-CO2 / DMT)

49

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

POSCO AST (formerly Daehan ST) specializes in stainless steel cold rolling products and was acquired by POSCO in July 2009. Our one-stop cold rolling production facilities produce wide-width products for universal use, high-precision thin steel sheet, and narrow-breadth products. We have finalized a plan to adopt new facilities for the production of wide-width precision products to reform and thus boost the growth potential of our business portfolio with the target of starting full operations by the first half of 2013. Moreover, with the merger with Daemyeong TMS in March and POSCO NST in December, we expect a synergy from business diversification and improved management efficiency, which will in turn enable us to take a big step toward becoming the top in the stainless steel cold rolling sector. Our reported revenue in 2012 was KRW 372.2 billion and operating income KRW 5.2 billion, and production reached 259,000 tons. We aim to achieve annual revenue of KRW 1 trillion by 2020 by strengthening precision “pre-marketing” activities and expanding the sales of value-added strategic products.

poSCo aSt


POSCO AST, guided by a commitment to green management, aims to achieve the vision of being “a market and technology leader in precision stainless steel and slitting products.” Our strategy for reaching this vision is to transition to low-carbon production processes, expand the use of energy-efficient materials, and participate in the enterprise-wide green growth projects of the POSCO Family. POSCO AST has made steady efforts to identify and invest in ways to reduce energy consumption. These efforts include the establishment of GHG inventory and the adoption of reduction technologies. We have set up a team exclusively responsible for securing expert knowledge and know-how required to set up an energy management system, respond to diverse regulations. A master plan has been es-tablished to control our energy consumption and respond to the GHG and Energy Target Management Scheme. A cleaner production system in our worksites has also been devised. Through these green management efforts, POSCO AST will actively respond to the risks and opportunities posed by climate change, achieving a GHG emission reduction of at least 4.1% from BAU by 2020.


Our CO2 emission intensity per ton of stainless steel has decreased by 2% to 0.190t-CO2 /t-s in 2012 from 0.194t-CO2 /t-s in 2011. The installation of tube mills and expansion of the factory building resulted in increased GHG emissions, but decreased malfunction rate and optimal production has lowered the emission intensity.

Green STS & Business

POSCO AST signed a voluntary agreement with the Korean government in 2004 regarding energy conservation and reduction of GHG emissions. Under the agreement, we have operated inverters, and replaced conventional lighting with more efficient systems in attempts to reduce CO2 emissions. The waste heat boilers produce some 10,000 tons of steam each year for use in our production process and heating system. In 2012, we completed the project of preventing heat loss in the annealing furnace and refurbishing our salt bath combustion system for LNG conservation, which contributed to reducing our energy use and GHG emissions. We will continue our reduction activities in 2013, by improving waste heat/facility operation of our new facilities. We are developing and expanding value-added strategic products such as new environment-friendly stainless steel products in order to achieve low-carbon, green growth and reduce CO2 emissions simultaneously. Meanwhile, we are undertaking various activities to reduce the GHG in society as well. These activities include supplying solar panels that are the core component of a solar photovoltaic power system, and energy-saving materials such as the Window Spacer that improve windows’ insulation performance.


2010 2011 2012



Total 0.199 0.194 0.190

50

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Since its establishment in 1982, POSCO Plantec has carried out diverse eco-friendly projects at home and abroad, and grown into a competitive engineering company. We are funneling our competencies and resources into achieving KRW 7 trillion in received orders and becoming a Great Plant Partner for a Smart World by 2020. Equipped with engineering competence and experience, POSCO Plantec has established a total engineering process from designing and procurement through to fabrication and implementation. At the same time, our business areas are expanding from steel facilities, industrial facilities, logistics facilities and industrial machinery to include solar photovoltaic power plants and power generation facilities.


POSCO Plantec is establishing a global environmental management system based on ISO 14001 standards. This system is guiding us in our pursuit of green businesses to respond to the risks and opportunities resulting from climate change and global warming. POSCO Plantec has secured production facilities for wind power generation, where it produces towers and turbine generators to participate in the off-shore wind power generation projects. We are expanding our solar photovoltaic energy business to overseas markets as well.


The GHG emissions of POSCO Plantec consist of direct emissions from the operation of boilers for cooling/heating of offices and vehicles transporting pre-fabricated steel frames to steelwork, and indirect emissions from the electricity consumption required to fabricate steel frames. Our CO2 emission in 2012 increased by about 11% at 2,102t-CO2 compared to 2011.

Green engineering & Business

POSCO Plantec is promoting diverse green businesses to reduce CO2 emissions. Since 2007 we have constructed 34 solar photovoltaic power facilities with a combined capacity of 48.1MW, which is equivalent to reducing 24,768t-CO2 of GHGs.

POSCO Plantec is also engaging itself in future-oriented businesses such as renewable energy and environment-friendly businesses. We have supplied 16.6MW of generation capacity in 18 solar photovoltaic power plant projects domestically, and 31.5MW in 16 countries in Asia and Europe, including Italy. In addition, POSCO Plantec is currently building a 5.0MW solar photovoltaic power plant in central Thailand.

POSCO Plantec is participating in POSCO Family’s Green Life campaign and encourages employees’ participation. We actively promote reducing GHGs and wastes through four actions: walk, turn off, reduce, and gather. We put up energy conservation stickers at our green stairways to encourage energy conservation in day-to-day activities, as part of our efforts to fulfill our social responsibility to preserve the environment.

poSCo plantec

~2008 2009 2010~ Total

Number of locations 12 4 18 34

Generating capacity (MW) 11.24 3.42 33.44 48.1

Construction of Solar Photovoltaic Power Plants

2011 2012

Direct emissions (Scope 1) Stationary combustion 426.7 339.2

Mobile combustion 361.0 347.9

Indirect emissions (Scope 2) Electricity combustion 1,099.8 1,414.9

Total 1,887.5 2,102.0

(Unit : t-CO2 )

51

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Pohang University of Science and Technology (POSTECH) was established in 1986 as a higher education institution dedicated to researching advanced science and technology theories and their wide-based applications. The institution offers top-tier education to a select number gifted students, to nurture world-class engineers, while cooperating with industry, other universities, and research institutions, thereby providing service to the country and humankind. POSTECH announced the POSTECH Vision 2020 which describes its goal of ranking as one of the world’s top 20 research universities, generating economic value through research outputs with significant academic and industrial impact.

Climate Change Strategy

POSTECH was selected to participate in the government’s GHG and energy target management scheme in September 2010 as an institution with high GHG emission and energy consumption levels. As the country’s leading research-oriented university, POSTECH is dedicated to the cultivation of green technology engineers and research in fundamental original technologies in order to actively cooperate with the government’s green growth policy as well as contributing to the growth of the country’s green industry through education. POSTECH is cultivating technical engineers through green technology education and is spearheading the research in the green technology field through research in fundamental original technologies. Thus, our goal is to provide engines for new growth to the POSCO Family companies, as well as contributing to the development of the country’s green industry. POSTECH set energy reduction targets and established in-house organizations (GHG & Energy Target Management Committee, Working Group) to implement the plan.

Green Research & Business

POSTECH cooperates with POSCO to develop new technologies for low-carbon, green growth (in steel and new growth sectors). Currently, we are focusing on the development of: renewable energy; steel products that will be used in environment-friendly vehicles; and marine bio-ethanol production technologies. In addition, in the field of education and research POSTECH is dedicated to the education and nurture of human resources specializing in green technologies. We graduate 210 green technology engineers annually through the Division of Advanced Nuclear Engineering, Graduate School for Wind Energy, Ocean Science & Technology Institute, Graduate Institute of Ferrous Technology, and Special Graduate Program. At the same time, researchers at POSTECH are conducting studies on 53 green energy projects (budget KRW 10.3 billion). POSTECH disseminates its energy conservation implementation plan to all its members, and is currently pursuing a solution business to implement the energy conservation project. POSTECH’s Energy Management Committee selected a solution provider to conduct a preliminary assessment so that subsequent activities of identifying and implementing reduction projects will be effective.

poSteCh

(As of 31 December, 2012, Unit : KRW in billions)

Entity in charge

Number ofpeople per annum

Budget

Division ofAdvancedNuclear

Engineering

Graduate School for

Wind Energy

Ocean Science &Technology

Institute

GraduateInstitute

of FerrousTechnology

Graduate School of

EngineeringMastership

POSCOLiaison center

Ministry ofEducation,

Science andTechnology

Ministry ofKnowledgeEconomy

Ministry ofEducation,

Science andTechnology

POSCO Ministry ofEnvironment

POSCO Family

companies and POSCO

30 25 13 113 28 155

29.8 1.1 55.6 194 64 2.3

(As of 31 December, 2012, Unit : KRW in billions)

Field Solar cells Fuel cells Rechargeable LEDs Carbon capture batteries

No. of projects 13 12 11 14 3

Amount 8.4 64.7 4.4 19.9 5.7

Field E-car Marine bio Functional materials

Amount 55.2 33.2 120.2

Non-GETItechnologies

GETItechnologies

* 2008~2011 data were compiled in accordance with the GHG and Energy Target Management Scheme statement submitted to the government (the data for 2011 were internally calculated and the verification is scheduled.)

52

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56


POSCO E&C is acutely aware of the relevance of the construction business and process in climate change, and reflects this awareness to its green management principle. In 2011, we acquired the GMS (ISO 14001 + GHG + Social Contribution) certification for the first time in Korea for an enterprise-wide, systematic management. We established the vision “Build the GREEN” with implementation strategies dubbed “Green Process,” “Green Business,” and “Green Culture.” The Green Process refers to minimizing GHG emissions from the designing stage through to the construction phase. Among the revenues reported in 2011, 38% is attributable to our green business. The Green Business strategy calls for identifying new environment-friendly businesses every year, contributing to the preservation of the Earth’s environment. As part of the Green Culture strategy, we are undertaking a variety of activities related to climate change such as taking the stairs under the Green Walk campaign, and contests for environment protection ideas and green management.

GHG emissions from Construction Activities

Unlike normal production, a construction process is very complicated, and the emission calculation standard was fixed by the Ministry of Land, Transport and Maritime Affairs in November 2012. The company’s GHG emissions since 2010 calculated according to the government’s calculation standards are as follows.

Green Construction & Business

In 2012, POSCO E&C built an independent computerized GHG system to minimize GHG emission during the construction process, and manages the volume of GHG emissions at the head office and 130 or so construction sites through this system. The GHG system was developed in accordance with the government’s GHG calculation standards designed for the construction industry. It enables various comparative analyses on GHG emissions and energy consumption, helping us to identify GHG reduction potential as well as room for cost reduction by saving energy. In the construction business, much GHG is emitted by the subcontracting partners. Unfortunately, most of these subcontractors’ GHG reduction activities are lacking. Thus under an agreement with the Ministry of Environment for the dissemination of green management signed in 2010, we provide assistance to 10 partner companies’ activities to reduce GHG emissions. Moreover, model cases of GHG reduction achieved by the partner companies are spread to other partner companies through the green management promotion contest that was launched in 2011. POSCO E&C contributes to preserving the environment through it construction business by actively pursuing diverse projects and research in the field of construction. These include GHG reduction through eco-friendly civil engineering such as the Green Building at Yonsei University’s Songdo Campus and developing the Songdo City; various renewable energy businesses such as off-shore, solar and tidal power generation; and building low GHG emitting plants and GHG capture plants.

poSCoe&CPOSCO E&C is a general construction company that was established in 1994 as POSCO’s three subsidiaries in the construction and engineering area were brought together (POSCO’s own construction and engineering division + Geoyang Industrial Development + PEC). Armed with plant engineering technology, knowhow and experienced manpower that POSCO amassed while building POSCO’s globally competitive integrated steel mills, we are aiming to become a global engineering and construction company. In 2012 we ranked 5th in Korea’s contracted construction, recording KRW 7,041.3 billion in revenues and KRW 355.8 billion in operating profits. With a vision to advance as a global top 10 total solution provider with received contracts of KRW 50 trillion and revenue of KRW 30 trillion by 2020, we are carrying out a series of projects including constructing steelworks, environment and energy plants; civil engineering; SOC business; and high-rise buildings in various parts of the world.

2010 2011 2012 (estimated)

Direct emissions (Scope 1) 5,609 8,421 7,575

Indirect emissions (Scope 2) 9,861 26,757 25,964

Total 15,470 35,178 33,539

(Unit : CO2 ton/year)

53

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56


POS-HiMETAL is aware of the managerial risk posed by the electric furnace that emits large volumes of GHGs. Thus, we signed an agreement in 2011 with KC Cottrell for the development of CO2 captur-ing technology. Through this agreement we will secure the technology of capturing carbon dioxide using dry sorbents and reusing the captured gas, while developing a capture process technology with optimized energy usage as well. POS-HiMETAL was designated as a target company for the GHG and Energy Target Management Scheme in 2012. Accordingly, it has been building a GHG inventory since November 2012 which is to be verified in March 2013. After verification we will apply the inventory to managing GHG emission levels at our production processes. In 2013, we plan to undertake the Smart Industry project by investing KRW 6.2 billion in collaboration with POSCO ICT. When the variable-frequency systems (inverters) are installed at the high-voltage dust collectors, we expect a decrease in annual energy consumption by 46 percent, KRW 1.38 billion saved in electricity bills, and 7,500 tons reduction of CO2 emissions.


As we are currently building our GHG inventory, we will manage CO2 emission intensity when it is completed and verified.


With the goal of building an environment-friendly FeMn plant, we are conducting a “Zero byproduct” project related to the company’s production process. Among the byproducts generated in 2012, 49 percent was reused at the processes, reducing the volume and expenses of externally treated wastes. At the office building and factory building, the interior/exterior lighting were all replaced with LED lights, which we expect will have the effect of reducing GHGs by decreasing energy consumption and through its long product lifecycle. In addition, at the rooftop of one of the office buildings, we installed a solar photovoltaic power generation facility which supplies one-third of the energy needed.

Electricity is a crucial production material for POS-HiMETAL. Thus, in order to prepare for power shortages due to extreme weather, we are conducting an energy saving campaign to reduce electricity consumption at the office, by turning off the lights between 10 to 12 in the morning, and refraining from using the air conditioners and heaters.

poS-hiMetal POS-HiMETAL was established as a joint venture between POSCO and Dongbu Metal that specializes in ferroalloy production in September, 2009. We supply POSCO with high purity FeMn (ferromanganese) to replace the expensive and unstable supply of Mn Metal imported from China, which is used in manufacturing high purity manganese steel plates. After the groundbreaking ceremony held in April 2010, the factory has been completed in September 2010. In June 2011 the electric furnace No. 1 went into operation and first tapping was in July and the first delivery was made to POSCO in August. Revenues in 2012 was KRW 155 billion, and production volume 114,000 tons. Our goal is to reach KRW 1 trillion in sales and 300,000 tons in production by 2020.

54

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Independent assurance report

Respective responsibilities of the management of POSCO and Samil PricewaterhouseCoopers

The Company’s management is responsible for preparing the subject matters in accordance with the criteria set forth in the POSCO GHG Accounting Guidelines and the POSCO Carbon Reporting Procedures.

Our responsibility is to provide a conclusion on the subject matters based on our assurance procedures in accordance with the International Standard on Assurance Engagements 3000 (Revised) – ‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’ issued by the International Auditing and Assurance Standards Board (“ISAE 3000”).

This report has been prepared for the management of the Company to assist the management in reporting on the Company’s carbon emissions performance and activities. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the management of the Company for our work or this report save where terms are expressly agreed and with prior consent in writing.

We read the other information included in the Carbon Report, including the information in the management commentary for the Company, and considered whether it is consistent with the subject matters. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the subject matters. Our responsibilities do not extend to any other information.

Assurance work performedWe conducted our engagement in accordance with ISAE 3000. For the subject matter of reasonable level of assurance, our work included examination, on a test basis, of evidence relevant to the subject matters. It also included an assessment of the significant estimates and judgments made by management in the preparation of the subject matters. We planned and performed our work so as to obtain all the information and explanations that we considered necessary in order to provide us with sufficient evidence on which to base our opinion.For the subject matter of limited level of assurance, our work included primarily inquiries of company personnel and analytical procedures applied to the subject matter. We planned and performed our work so as to obtain

moderate assurance as to whether the subject matters are free of material misstatement.

Inherent limitationsNon-financial performance information is subject to more inherent limitations than financial information, given the characteristics of the subject matter and the methods used for determining such information. The absence of a significant body of established practice on which to draw allows for the selection of different but acceptable measurement techniques which can result in materially different measurements and can impact comparability. The precision of different measurement techniques may also vary. Furthermore, the nature and methods used to determine such information, as well as the measurement criteria and the precision thereof, may change over time. It is important to read the subject matters in the context of the POSCO Accounting Guidelines and the POSCO Carbon Reporting Procedures.

In particular, the conversion of material used to carbon emissions is based

upon, inter alia, information and factors derived by independent third parties

as explained in the POSCO GHG Accounting Guidelines. Our assurance work

has not included examination of the derivation of those factors and other

third party information.

OpinionBased on the results of our procedures:

• In our opinion, direct (Scope 1) & indirect (Scope 2) CO2 emissions per

ton of crude steel for the years ended December 31, 2012, 2011 and 2010 as described in page 13 of the POSCO Carbon Report, are fairly stated, in all material respects, in accordance with the POSCO GHG

Accounting Guidelines.

• As a result of our review, nothing has come to our attention that causes us to believe that other (Scope 3) CO2 emissions data and GHG reduction effect in society data for the year ended December 31, 2012 are not presented fairly, in all material respects, in accordance with the POSCO Carbon Reporting Procedures.

To the management of POSCOWe have been engaged by the management of POSCO (herein called the “Company”) to perform certain independent assurance activities in regards to the following aspects of POSCO’s Carbon Report 2012 (herein called “Report”)

•��Direct (Scope 1) & Indirect (Scope 2) CO2 emissions per ton of crude steel for the years ended December 31, 2012, 2011, and 2010 as described in table on page 13 (“the subject matters of reasonable assurance”).

•� Other (Scope 3) CO2 emissions data and GHG reduction effect in society data for the year ended December 31, 2012 as described in table on page 13 (“the subject matters of limited assurance”).

Samil PricewaterhouseCoopers

Ongyun Chang, Assurance

April 26, 2013

55

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

index reported not applicable

Global reporting initiative G3.1 Guidelines

EN3 Direct energy consumption by primary energy source. 14

EN4 Indirect energy consumption by primary energy source. 14

EN5 Energy saved due to conservation and efficiency improvements. 18,19

EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives.

30,31

EN7 Initiatives to reduce indirect energy consumption and reductions achieved. 17

EN16 Total direct and indirect greenhouse gas emissions by weight. 13

EN17 Other relevant indirect greenhouse gas emissions by weight. 13,24,25,28

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. 11,12

dow Jones Sustainability indexes

Carbon disclosure project indicators

Management 1. Governance Group and Individual Responsibility 9,10 Individual Performance 13 2. Strategy Risk Management Approach 8,9 Business Strategy 11 Engagement with Policy Makers 39,40,41 3. Targets and Initiatives Targets 12 Avoided emissions 13,24 Emissions Reduction initiatives 11,12 4. Communications Communications 39-41 Risk & Opportunity 5. Climate Change Risk Regulatory/physical/other 8,9 6. Climate Change Opportunities Regulatory/physical/other 8,9 Emissions 7. Emissions Methodology Base Year 12 Methodology 12 8. Emissions Data Boundary 14 Scope1 and 2 Emissions Data 13 Exclusions - Data Accuracy 55 External Verification or Assurance 55 Carbon Dioxide Emissions from Biologically Sequestered Carbon - 9. Scope 1 Emissions Breakdown 13 10.Scope 2 Emissions Breakdown 13 11.Energy 14 12. Emissions Performance Emissions History 12,13 Emissions Intensity 12,13 13. Emissions Trading - 14. Scope 3 Emissions 13

Extent ofReporting

Extent ofReporting

PagesFound

PagesFound

Description

Description

Indicator

2.3.2 Please provide your company's total direct greenhouse gas emissions (DGHG SCOPE 1) for the part of your company's operations for which you have a reliable and auditable data acquisition and aggregation system.

13

2.3.3 Please provide your company's indirect greenhouse gas emissions from energy purchased (purchased and consumed, i.e. without energy trading) (IGHG SCOPE 2) for the part of your company's operations for which 13 you have a reliable and auditable data acquisition and aggregation system.

2.3.4 Please complete the following table about total energy consumption. For each row in the table, it is mandatory that the values provided are in the same unit.

14

2.3.5 Please provide your company's electrical energy purchased (purchased and consumed, i.e. without energy trading) for the part of your company's operations for which you have a reliable and auditable data acquisition and aggregation system.

14

2.4.1 The following questions were developed in alignment with the Carbon Disclosure Project (CDP) methodology as

part of a collaboration between RobecoSAM and CDP. -

2.4.2 Where is the highest level of direct responsibility for climate change within your company? 19

2.4.3 Does your company provide incentives for the management of climate change issues, including attainment of targets?

11,12

2.4.4 What best describes your risk management procedures with regard to climate change risks and opportunities?

8,9

2.4.5 Does the use of your company's goods and / or services directly enable greenhouse gas (GHG) emissions to be avoided or reduced? 13,24,25,28

2.4.6 For your combined emissions reduction activities that were active in the latest reporting year, please provide the total amount of anticipated annual CO2 and cost savings from these initiatives.

13

2.4.7 Have you identified any climate change risks (current or future) that have potential to generate a substantive change in your business operations, revenue or expenditures?

8,9

2.4.8 Have you identified any climate change related opportunities (current or future) that have the potential to generate a substantive positive change in your business operations, revenue, expenditure 8,9 (i.e. opportunities driven by changes in regulation, physical, or other climate-change related developments)?

2.4.9 Please indicate your company's corporate targets to reduce greenhouse gas emissions. Please provide either absolute or relative targets (or both if available).

12

2.4.10 As part of Scope 3 in the GHG Protocol, please indicate how your company considers GHG emissions for your company's supply chain (upstream), customers (downstream) and support services.

13

EP - Direct Greenhouse Gas Emissions (Scope 1)

EP - Indirect Greenhouse Gas Emissions (Scope 2)

EP - Energy Consumption

EP - Electricity Purchased

Climate Strategy - CDP Alignment

Climate Change Governance

Climate Change Management Incentives


Climate Change Products

Climate Strategy Impacts

Financial Risks of Climate Change

Financial Opportunities Arising from Climate Change

EXPOSURE: Carbon Targets

EXPOSURE: Scope 3: GHG Upstream

Extent ofReporting

PagesFoundDescriptionIndicator

Indicator

56

2012 CARBON REPORT

Carbon report 2013

NavigatioN MeNu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Through the cover of the POSCO Carbon Report that has been published

for three years between 2010 and 2012, we strived to convey a constant

message with the theme “POSCO’s carbon management that evolves and

expands.” The process of iron ore being turned into a valuable steel

product through the iron making and steelmaking processes was

expressed as curves becoming straight lines and then transforming into

figures, symbolizing POSCO’s determination, efforts and vision.

We hope for your continued interest in POSCO’s venture toward a

new tomorrow, further advancing its carbon management through

systematic strategy building and active implementation.

You may find various kinds of information on the POSCO website (www.posco.com), including a PDF version of this Report. Please use the following email, telephone number of mailing address to submit questions or comments on this Report.

Download www.posco.com e-mail [email protected] tel 02-3457-1752address POSCO Environment & Energy Planning Dept., Climate & Energy Affairs Group, 892 Daechi-dong, Gangnam-gu, Seoul, Korea 135-777

Carbon report 2013

naviGation Menu



report FeatureS

Ceo MeSSaGe

exeCutive SuMMary



GovernanCe


perForManCe

poSCo Carbon FloW






Carbon Market



Green WorkplaCe


Carbon dialoGue


poSCo enerGy

poSCo C&C

poSCo CheMteCh

SnnC

poSCo aSt

poSCo planteC

poSteCh

poSCo e&C

poS-hiMetal


index

01

02 03

04

05 06

07

08

09 10

11 12

13

14

16

17 18 19

20 21 22

23

24 25 26

27

28

29

30 31 32

33

34 35

36 37

38

39 40 41

42 43

44

45

46

47

48

49

50

51

52

53

54

55

56

Desig

ned

by D

ESIG

NPLU

S

Scan the QR code to receive more detailed information on the POSCO Carbon Report.

WWW.poSCo.CoM

This report printed on Forest Stewardship Council-certified paper.

http://www.posco.com

Documents

Carbon report 2012 - main | POSCO · report FeatureS Highlights from Carbon Report 2012 Since the first POSCO Environmental Report was released in 1995, we have regularly disclosed