Does RE100 Reach Your Company? An Eight-Question Self-Check

"I understand RE100 matters, but I can't tell whether it actually reaches our company." This is the thing we hear most often from people working at small and mid-sized manufacturers. The news only ever covers the large groups, which makes it hard for a company with revenue in the tens or hundreds of billions of won to judge whether the issue concerns them.

Why something "voluntary" feels like an obligation

RE100 was originally a global campaign that large companies around the world join voluntarily. Global IT companies declared first in 2014, and some 400 companies worldwide now take part.

The issue is that these companies have begun requiring renewable electricity use across their entire supply chains. Major global and Korean corporations requiring RE100 compliance from their suppliers is spreading fast, and the requirement is passed down the chain in the following sequence.

In several recent surveys, a considerable number of small and mid-sized manufacturers have already reported either receiving RE100 requirements from customers or feeling the pressure to switch. The share is rising fastest among tier-2 and tier-3 suppliers in semiconductors, automotive and electronic materials in particular.

A three-minute self-check: does RE100 reach your company?

If three or more of the eight items below get a "yes", you are at the stage of starting to prepare a response.

□ 1. Does some meaningful share of your revenue come from exports? Direct exports count, and so do indirect exports through supplying an exporting corporation. Priority is high in particular if sales to the EU, the United States and Japan are 20% or more of the total.

□ 2. Are you a tier-1 or tier-2 supplier to a major Korean or overseas corporation that has declared RE100? The number of Korean corporations that have joined RE100 keeps growing, and they are gradually adding renewable electricity use to the criteria for selecting and retaining suppliers.

□ 3. Are you in semiconductors, displays, automotive parts, electronic components or secondary battery materials? These are the sectors where global supply-chain RE100 pressure is coming down fastest. Cases where a customer's due diligence items explicitly include the renewable electricity share are increasing.

□ 4. Have you been sent a customer ESG due diligence request or a supplier assessment questionnaire in the past two years? If the questionnaire included "share of renewable electricity", "carbon emissions (Scope 1 and 2)" or "RE100 compliance plan", you are already in scope.

□ 5. Is your annual electricity use 1,000 MWh or more? For a plant with manufacturing processes, annual electricity use of 1,000 MWh or more (roughly 83 MWh a month) often makes you subject to carbon emissions reporting. You can check this by adding up the past year's usage on your KEPCO bills.

□ 6. Has a customer ever asked you to submit carbon emissions data? Since the discussion around CBAM (the Carbon Border Adjustment Mechanism) spread, these requests have been increasing, starting with companies involved in exports to the EU. If the reporting template contained Scope 1 and 2 emissions, electricity use and the renewable share, this applies to you.

□ 7. Are you planning a new export contract or entry into a large company's supply chain within the next three years? Cases of being asked to submit an RE100 compliance plan when signing a new contract are increasing. Without preparation in advance, there is a risk of being dropped at the contract stage.

□ 8. Does your company website, IR material or sustainability report still have nothing on ESG or carbon neutrality? Check this one if the answer is "nothing yet". Paradoxically, it is a signal that a response is urgent, because investors, buyers and financial institutions are asking for ESG information more and more often.

Reading your result

Three practical actions to take right now

Broadly, there are five ways to comply with RE100 in Korea: the green premium scheme, buying renewable energy certificates (RECs), a third-party power purchase agreement (PPA), self-generation, and equity investment. The cost, risk and lead time of each option differ, and because the best mix depends on a company's power use pattern and financial position, a comparative analysis is essential.

Closing: time is cost

Responding to RE100 is structured so that the earlier you start, the lower the cost. There are three reasons.

• Renewable procurement contracts (PPAs and RECs) favour those who move first, because demand is expected to surge.
• Support for self-generation equipment is on a declining trend. It is better to take government subsidies and tax credits early.
• Once customer requirements become explicit, the "cost of preparing in a hurry" is added on top. Short-term consulting, buying RECs at high prices and bringing in temporary staff all fall under this.