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Minimizing of greenhouse gases and pollutants to preserve the global environment

“ SK innovation applies its own strict environmental standards that include managing air pollutants,
water pollutants and wastes ”

Climate Change Management

SK innovation has been managing greenhouse gas emissions and energy consumption based on the government's ‘management-by-objective
operation guidelines’, since the company was selected as being subject to the policy. We were also the first in Korea to adopt an internal emission
trading scheme in 2007. We further established a set of execution measures which mainly revolves around the nationwide emission trading system
that started in 2015. We are operating emission trading system operation procedures to comply with the relevant laws and regulations and to
improve per-unit greenhouse gas emissions compared to energy consumption.

In addition, we are operating GEMS (GHG & Energy Management System) which is interfaced with OIS (Operation Information System) intended for
systematic management of information such as energy consumption by production activity and greenhouse gas emissions. GEMS collects daily
information from OIS and automatically calculates greenhouse gas emission, enabling us to systematically estimate and manage emissions while
checking and efficiently responding to the annual objective achievement status.

Energy Consumption/GHG Emissions

Type 2016 2017 2018 2019 2019(Targeted) 2020(Target)
Energy Consumption(MWh) 51,104,325 52,290,305 53,877,294 45,404,321 45,391,689 44,820,475
GHG Emissions (tCO2eq)1) 12,765,304 12,884,478 12,870,112 12,518,151 12,796,308 12,392,968

1) GHG Emissions (Scope1&2)

Air Pollutants Management

We apply strict standards on air pollutant emission management to minimize the discharge of air pollutants. We continue to monitor environmental
contaminant emission status with the introduction of TMS (Tele-Metering System), a remote monitoring system, in major discharge facilities. To
ensure pleasant air quality in and around our networks, we operate odor prevention facilities and VOC channels, based on environmental issues of the
neighboring areas.

Air Pollutant Emissions Volume

Type 2016 2017 2018 2019 2019(Targeted) 2020(Target)
NOx Emissions
(metric tonnes)
8,188 7,909 8,541 7,359 8,261 7,285
SOx Emissions
(metric tonnes)
4,085 3,950 3,103 2,188 3,055 2,166
(metric tonnes)
359 332 323 297 360 299
(metric tonnes)
200 159 158 136 158 137

Waste Management

Under our waste management system, we deliver most of the collected and discharged waste to specialized waste treatment companies with proven
capabilities to have the wastes incinerated or buried. We transport waste oils, among designated wastes, to a renewable fuel plant to be used in
renewable fuel production, and extract only metal substances from wastes that contain metals for recycling. These are part of our efforts to minimize

Waste Discharge by Type

Type 2016 2017 2018 2019 2019(Targeted) 2020(Target)
Designated Waste
(metric tonnes)
42,360 50,229 59,326 67,491 63,676 66,816
General Waste
(metric tonnes)
68,854 61,919 68,332 74,803 76,062 75,407

Environmental Investment

[Unit : KRW million]

Type 2016 2017 2018 2019
Total environmental investments & expenses 69,789 86,962 105,823 164,152
(Investment Plan for Existing) (27,197) (30,533) (51,485) (82,024)
Capital investments1) 31,008 28,051 50,917 84,907
Operational expenses2) 38,771 58,911 54,906 79,182
Environmental Benefits3) 9,632 28,883 59,954 46,508

1) Capital investments includes expenditures related to energy saving, process improvement, product improvement, education and training costs, etc.
2) Operational expenses includes expenditures related to the operation of environmental facilities, operation of resource conservation & recycling facilities, waste disposal cost, etc.
3) Environmental benefits include savings and cost avoidance from by-product disposal, process improvement and water recycling, as well as from tax incentives, etc.

Environmental Impact Assessment

Environmental Impact Assessment Results of SKI Upgrading Project