HYOSUNG TNC

For over six decades, Hyosung has opened up new horizons in numerous technological developments aimed at improving people’s lives. In doing so, Hyosung has come to stand shoulder to shoulder with global companies in technology and product quality. Hyosung's wish for a better life for humanity has led to concrete achievements in various fields. Hyosung has been leading the circular economy, producing eco-friendly B2B products, and taking the lead in protecting the global environment by reducing greenhouse gas emissions. Today, Hyosung is relentless in innovations to achieve a greener planet, utilizing hydrogen to make a net-zero environment for our future generation. Hyosung has continued its efforts toward environmental, social, and governance (ESG) issues, such as circular economy, sustainability, and carbon neutrality. Let’s take a look at Hyosung’s Five Management Principles. These principles, the basis for all Hyosung-affiliated businesses, provide a glimpse of its future initiatives. Here are the detailed descriptions of the five principles that have been the backbone of Hyosung's business. [Hyosung's Five Management Principles] l People-oriented business: Valuable relationship with people always comes first. l Customer-oriented Management: We listen to the Voice of the Customer (VOC) l AGILE Management: Quick response to change l Exceed expectations: Offer the best quality l Data Utilization: Think and prove based on systematic, scientific data 1) People-oriented business: Valuable relationship with people always comes first Hyosung’s first and far most crucial management principle is putting people at the front line of business. The engine for success is all about people. Suppose Hyosung is a large ship sailing the sea of the economic market. In that case, a navigator must establish a destination, a helmsperson who steers the ship, and a captain to direct the crew. In other words, Hyosung can only arrive at its destination with the collective power of talented individuals as a team, using their skills in various fields to sail the ship. Hyosung has grown into an international corporation leading the global market trend thanks to the efforts and passion of its executives and employees in various fields. Hyosung exists because of its employees. This principle is proven by their various employee education programs, fostering next-generation leaders. Hyosung provides training for all employees of all duty and position. In addition, the company annually selects employees above the manager level to conduct an interview with executives, and run mentoring programs. They also operate motivational programs encouraging employees to learn a new language. A short-term executive MBA course is also in place for executives to share the professional knowledge necessary for business division management. In addition, the Hyosung Talent Award and Outstanding Employee Award celebrate individuals in all Hyosung affiliations who have achieved personal growth and excellent business performance in their areas. These awards strengthen loyalty and provide valuable experiences for employees to feel rewarded, motivated and pride in their work. 2) Customer-oriented Management: We listen to the Voice of the Customer (VOC) Hyosung's management principal goal is to satisfy its clients. Under the belief that all answers in the market lie with the customers, Hyosung has concentrated its management on identifying and discovering the needs of consumers and providing good value. By listening to the voices of customers, Hyosung understands what they desire more quickly and accurately than anyone else. This approach has become the foundation for Hyosung in developing new technologies and products in the market, discovering new global supply chains, and building a worldwide network. Hyosung developed a project coined ‘C-Cube,’ a big data based on customers' feedback, opinions and market situations, and has been utilized across all affiliations. This project has been developed to satisfy Hyosung's B2B customers. The big data is based on the voices of our customers and competition. Based on this data, Hyosung is consistently connecting with the Voice of Customer (VOC) and is striving to improve customer satisfaction. In addition, Hyosung has been seeking a win-win growth strategy with small and medium-sized enterprise (SMEs) customers by supporting them to enter overseas markets. Also, The Company is installing booths and seeking marketing opportunities with SMEs at various global exhibitions. 3) AGILE Management: Quick response to change Hyosung has experienced dramatic economic growth from the 70s to the 80s, when manufacturing was the dominant industry, to the blooming of the IT industry in the 2000s. Hyosung is now facing the 4th industrial revolution and understands the importance of organizational agility. It is critical to efficiently adopt new technologies and trends in this time of transformation. AGILE management principle aims to increase the speed and efficiency of the organization and quickly grasp the flow of market changes that lead to the trends. With AGILE management, Hyosung expects to create new business opportunities and quickly grasp the opportunity. Hyosung's development of eco-friendly B2B products is a typical example. From the early 2000s, Hyosung began paying attention to sustainability and environmental issues. At that time, interests in the global environment were less fervent. Leading eco-friendly innovation, Hyosung developed regen® ocean nylon, the world's first recycled yarn produced from fishing net waste, one of the main culprits of marine pollution. In addition, the company developed regen® polyester made from 100% plastic bottle wastes for the first time in Korea, and is supplying the recycled yarn to global apparel brands. By developing post-consumer recycled (PCR) products, Hyosung has successfully introduced an economic cycle in the textile industry and creating consumption value for environmentally conscious consumers. Furthermore, Hyosung is actively developing new businesses that can contribute to solving global warming. Specifically, the company has built a liquefied hydrogen plant for hydrogen vehicles to reduce greenhouse gas emissions and become carbon neutral. Hyosung has also been working to produce green hydrogen by developing carbon fibers essential for high-pressure hydrogen transportation. 4) Exceed expectations: Offer the best quality Since the 1960s, Hyosung has been leading the synthetic fiber industries, heavy industries, advanced material, and chemical industries. Hyosung has been concentrating on technology development and product innovation to produce high-quality products that exceed the expectations of customers. Its achievements are evident through numerous domestic and overseas patents - 548 domestic and foreign textile-related patents, 708 advanced materials-related patents, 1,037 chemical-related patents, and 692 heavy industries-related patents. Multiple patented technologies created by Hyosung's researchers and technicians are truly the foundation for the company's sustainable growth and customers' better future. Hyosung succeeded in developing recycled nylon yarn for the first time in the world, leading the production of environmentally friendly fibers and accelerating the economic cycle in the textile market. Through constant technological development, Hyosung is being recognized in many fields, including the global spandex and tire cord, where Hyosung boasts global no. 1 market share. Hyosung has been continuously developing new materials, including spandex creora®, and carbon fiber TANSOME®, the primary material for hydrogen storage containers. Polyketone, FDA-approved eco-friendly plastic using carbon monoxide as raw material, is the world’s first of its kind. Hyosung's best technology permeates every aspect of our daily lives with these new materials. In addition, Hyosung has continued R&D and investments to take lead in the high-technology industry and is continuously developing technologies with new materials, big data, and artificial intelligence. 5) Data Utilization: Think and prove based on systematic, scientific data Hyosung's customers are not limited to specific regions as they are distributed worldwide. They are diversified around multiple industries, value chains and roles, including production, sales, management, and R&D. Hyosung's branches and corporations worldwide collect VOC and vast information regarding customers, competitors, and markets. Hyosung intends to utilize such data through systematic and scientific database management based on VOC collection. Data-based management has the advantage of being able to identify and collect data to lead the market trend. Hyosung uses VOC in various ways, from customer strategy to product and technology development, investment-related strategy establishment, and decision-making. For B2B clients who have been our clients for a long time, Hyosung considers trust crucial in business relationships. The data Hyosung accumulates from the customers enables to build a long-term relationship by predicting future market changes and identifying the correlation between our customers’ competition and the market. Hyosung is also building an intelligent factory as digital transformation (DX) in the 4th industrial revolution will increase the competitiveness of the manufacturing industry. Hence, Hyosung is innovating the production process by introducing smart factories domestically in the Changwon plant and overseas locations, including China, Vietnam, and India. Hyosung's Five Management Principles for Sustainable Growth to Protect the Future of Mankind Hyosung's Five Management Principles outline the company's present and future directions. Each of these principles is closely related to ESG and sustainability. Based on the philosophy of placing people first, Hyosung listens to customers, responds flexibly and with agility to the changing markets, develops high-technology quality products, and carries out scientific management. Through mission-driven management toward ESG, Hyosung has developed eco-friendly products ahead of the times. Hyosung makes an enterprise-wide effort to operate its company considering even the small details, with the intention to create an environment where people can lead a comfortable, safe and eco-friendly life. Hyosung's multifaceted efforts illuminate the company's successful future by enabling rapid change ahead of the era of constant development and revolution.

The unparalleled global leader in spandex Recent muggy summer weather has pushed many people to turn to outdoor activities or a dip into the pool. More people are thus opting for ‘athleisure’ clothing. Hyosung’s creora® is the main driver behind the casual clothing trend. The spandex brand has continued in the number one market share position for ten years. You might be surprised to discover that creora® is at the core of almost all major sportswear products we use daily. From latecomer to forerunner: Early investment in assembly lines for high-performance products and locally customized marketing paid off Hyosung was the first Korean company to develop this spandex technology back in 1992. Known as the ‘memory chip of textile,’ spandex can stretch up to five to eight times longer than its original length without any change to its original form. Its everyday application ranges from sportswear and underwear to socks and even masks. Though it was a latecomer in the global market, Hyosung dreamed big to create “the world’s best spandex that ushers in a creative 21C’ and named it ‘creora®’ – a combination of two words: ‘creative’ and ‘ora'. And 20 years later, the rest is history. As early as the late 1990s, Hyosung recognized the importance of having an extensive global reach and establishing assembly lines in countries such as China, Vietnam, Turkey, and Brazil. The goal was clear: A stable supply of various products that meet the needs of different customers in different markets at the time they want. Having these production lines ready early and focusing on developing high-performance products has paid off in distinguished stretch, recovery and comfort. It joins with textile businesses and global apparel names to identify market trends and build longer-run business partnerships. In warmer weather, Hyosung proposed products made of yarns with anti-bacterial and UV cut properties. In places like Brazil, known for its love for vivid colors, the company’s customized marketing strategy provides textiles with excellent dyeing properties. Fabric that fits like your own skin Various products are available under the creora® brand that comes in varying characteristics and meet different needs. creora® Power-Fit is a spandex with high power and excellent heat resistance, maintaining its fabric power even at high temperatures or re-dyeing. This offers outstanding deeper color and better fastness dyed with dispersed dyestuff, with excellent stretch recovery. Additionally, it fits like your own skin offering comfort in daily activities and sports. creoa® highly prevents spandex degradation by chlorine elements often used for swimming pool sterilization. It offers higher chlorine resistance than that of general spandex, and thus is applied to swimwear to improve fabric durability. creora® Fresh is a spandex product that possesses excellent deodorizing and durability attributes. Because it effectively removes odors caused by post-exercise sweat, creora® Fresh is always pleasant to wear and leaves you with a refreshing feeling. Additionally, creora® Color+ with the unique color fastness and creora® Black with a deep and exclusive black color also make the color of fabrics deeper and offer comfortable support for the body movements. creora®, rise high with the wings of sustainability As an unparalleled market leader for over 10 years, creora® continues to fulfill its commitment to sustainability through its ESG management. creora® eco-soft enables heat setting at a low temperature compared to common spandex and requires minimal energy consumption when producing yarns, thus reducing carbon dioxide emissions. A production of 10,000 T-shirts with 250g/yd (4% spandex) can cut at least 120kg worth of CO2. regen® spandex, a 100% recycled spandex is made from reclaimed industrial waste. It contributes to preserving our environment while offering a similar level of functionality to new spandex despite being produced from recycled material. creora®’s commitment to preserving environments geared toward sustainable yarns will only grow with time. Shortly, it plans to develop a detailed vision for developing bio-based yarns and reducing oil consumption. At the same time, it aims to further consolidate its position as the number one spandex by expanding its market share to 34% by 2026. creora® will only continue to rise higher.

Eco-Friendly Trend in the Fashion Market Fashion is one of the most expressive ways to identify oneself. Although there are considerations when buying clothes, such as design, color, practicality, and comfort, young people use fashion to reflect their thoughts, values, and personal preferences. Recently, environmentally friendly products have gained interest globally and become a trend in the fashion industry, especially among Generation Z. Due to the emerging eco-friendly fashion trends in textiles, the consumer have begun to pay attention to eco-friendly fiber. Such fiber reduces carbon emissions to protect the global environment by limiting fossil fuel consumption throughout the cycle of production, distribution, and purchase. regen®, Hyosung’s eco-friendly fiber brand is 100% recycled fibers, and is recently leading this trend. regen® Sources its Raw Materials from 100% Used PET Bottles The ‘OECD's Global Plastics Outlook’ states that plastic waste will triple from 353 billion tons in 2019 to 1.14 billion in 2060. Are there any contingency plans to reduce the amount of plastic waste? The answer could be discovered in the plastic waste itself. Hyosung TNC launched its textile business in the 1960s and has contemplated resolutions to reduce plastic waste by recycling them. The company found a clue from polyethylene terephthalate (PET) plastic bottles, a standard waste product. PET bottles are created from polyester, thus, they can be recycled into polyester yarn, one of the synthetic fibers produced by Hyosung TNC. In 2008, Hyosung TNC became the first and foremost recycled polyester fiber provider in Korea, successfully presenting their recycled polyester fiber after five years of R&D. It is called “regen®,” which abbreviates the word regeneration. regen® recycles products that have been used and discarded, to create an entirely new product. Transformation of post-consumer waste PET bottles into regen® starts from collecting and thoroughly cleaning used bottles. Then, the cleaned bottles are crushed and melted into plastic chips, the size of a small rice grain. These chips are then melted and extruded at high temperature, transforming the waste plastic bottles into regen®, a 100% recycled polyester yarn. Since recycled yarns use waste bottles as the raw material, maintaining the same quality as existing virgin product is highly challenging. However, Hyosung TNC made a breakthrough with their superior technology. regen® demonstrates quality at par with existing standard polyester yarn, featuring an even, luxurious appearance; it also maintains vivid colors when dyed. regen® minimizes not only microplastic waste but also reduces plastic waste in landfills, reducing additional carbon dioxide emissions which could have come from burning used bottles. One ton of regen® yarn requires about 866 500ml plastic bottles; hence, it is one of the most representative types of eco-friendly yarn technology. regen® Ocean, regen® Seoul, and regen® Jeju: Named after the Origin of Used PET bottles Hyosung TNC strives to reduce plastic waste in the ocean. Hyosung TNC reinforces its recycling technology for post-consumer PET bottles, launching regen® Polyester and regen® Ocean Polyester. As for the regen® Ocean Polyester, it is strictly sourced from discarded waste bottles collected from the seashore within 200 meters or 10 km from the coastline, where there is no waste collection facility nearby. In other words, it either utilizes the floating waste PET bottles collected in the ocean or submerged waste – ocean waste that cannot be reached from the facility on the shore. In collaboration with Yeosu Gwangyang Port Authority, regen® Ocean Polyester was developed from recycled PET bottles and yarns discharged from vessels near the port area. The regen® Ocean Polyester has been accredited the Ocean Bound Plastic (OBP) certification for the first time in Korea from the Control Union, a prestigious eco certification body in the Netherlands. Hyosung TNC also introduced regional editions that specify the regions where the waste PET bottles were collected. Since 2020, the company has been producing regen® Seoul and regen® Jeju, utilizing recycled PET bottles collected from the city of Seoul and Jeju, respectively. regen® Ocean Nylon Protects the Marine Environment by Recycling Discarded Fishing Nets One of Hyosung TNC's recycled yarns, regen® Ocean Nylon, is “the world's first technology of its kind.” This eco-friendly yarn from waste fishing nets is a recycled fiber that requires more advanced technology compared to regen® Polyester. Hyosung TNC is profoundly interested in the aquatic ecosystem, recognizing that 46% of discarded garbage into the sea is waste fishing gear, such as fishing nets and lines. Abandoned fishing nets do not decompose well in the sea and endanger sea creatures. To help save the sea creatures, Hyosung TNC developed regen® Ocean Nylon, the world's first post-consumer recycled nylon fiber made by recycling waste fishing nets collected from the ocean. Hyosung TNC plans to facilitate marine environment protection by increasing regen® Ocean Nylon sales and introducing recycled yarns in more diverse fields. Contributing to Creating a Virtuous Cycle for Plastic – Regen Has It Covered Hyosung TNC’s regen® products are examples of post-consumer recycled (PCR) products used by end-users and recycled into entirely new products. These products of Hyosung are currently leading the economic cycle of the textile industry. As a sustainable fiber that contributes to reducing waste, the regen® products directly practice circular economy by recycling used resources. regen®, pursuing both environmental protection and high-quality performance, is used in various fields, from outdoor to fashion brands to the automobile industry, through collaboration with leading global brands. regen® is the cornerstone of circular economy for plastics that contribute to creating a healthy environment. For consumers who value eco-friendliness and sustainability, please remember regen® when shopping.

The uprising trend for future-oriented business: ESG Concerns about climate change, global warming, and depleting resources have brought the idea of a new growth paradigm to the fore. Once foreign to many, the word ‘sustainable growth’ has become the uprising trend for future-oriented businesses. ESG, the acronym for Environmental, Social, and Governance, now has become a critical business milestone in their business direction. At the same time, it is also true that some businesses conveniently chose to jump on the bandwagon to claim that they have adopted ESG management just because sustainability is in fashion. Here we have a company that has advanced our life for humanity; its business mission leading in various activities designed for environmental protection and carbon neutrality. That is no other than Hyosung, a leader in technology. To minimize its corporate footprint, Hyosung has been dedicated to sustainable growth by developing products and technology designed to facilitate the hydrogen economy and develop resource recycling technology and eco-friendly materials. And we at Hyosung stand by our numbers. Our environmental research and development investments are estimated to be over KRW104.3 billion (USD75 million), and our registered patents are over 3,310. Hyosung’s mission to sustainable management, ‘Green Management Vision 2030’ The most notable eco-friendly activities pursued by Hyosung include its initiative called ‘Green Management Vision 2030.’ The initiative has four targeted goals of greenhouse gas reduction, development of eco-friendly technology and expansion of subsequent markets, building a green company culture, and enhancing stakeholder trust. Hyosung has pursued subsequent strategies alongside its company-level climate change strategy for sustainable management. 1) Greenhouse gas reduction In line with the nationally determined contribution target set forth by the ROK government in 2021, Hyosung has renewed its commitment to greenhouse gas reduction from a 20.5% cut in 2017 to a 14.5% cut in 2018 under its Green Management Vision 2030. As such, the company has established a mid-and-long term reduction plan across the whole business encompassing planning, research, and production. On top of this, the risk management process on climate change is now in place to identify risks and opportunities that climate change brings and to update risk management status annually for the sake of ESG management. 2) Development of eco-friendly technology and expansion of subsequent markets Based on the goal of developing eco-friendly technology and expanding subsequent markets under Vision 2030, Hyosung has put the utmost effort into R&D in technology and product development to secure new growth engines and accomplish sustainable growth. Let’s take a look at some of those examples. ■ A key renewable energy technology, energy storage system or ESS that enables storage of electricity for future use Energy storage system or ESS, which helps save electricity for future use, is emerging as one of the most important facilities for the energy industry and electricity of the future as renewable energy power generation is growing in share. Hyosung offers a whole life-cycle service on ESS encompassing customized consulting, system building, and post-management. Our technology has received rave reviews from electricity powerhouses in Europe. Hyosung Heavy Industries signed a contract in 2021 to supply 50-megawatt energy storage systems to U.K. energy infrastructure investment company Downing LLP. With this deal, Hyosung is providing a total ESS solution to the UK that will involve designing, supplying, and a 10-year maintenance service. It is noticeable that the ROK company’s proprietary technology has been recognized by the UK, a country that has been leading the world’s efforts in carbon neutrality and a transition to renewable energy. ■ Insulating materials such as transformer and gas insulated switchgear replaced with green products Hyosung Heavy Industries, a leading provider of electric equipment such as transformers and gas-insulated switchgear that are key to the electrical grid, has led the efforts to develop and commercialize green insulating materials. Hyosung has developed an eco-friendly transformer using ester oil as alternative insulation, reducing environmental impact, and enhancing safety against fire. Hyosung has been supplying this eco-friendly transformer to overseas markets such as Europe and the Middle East. The company also developed 170kV Gas Insulated switchgear utilizing Novec gas blending in 2021 and plans to adopt it to newly built power transmission plants and projects designed to replace outworn facilities to reduce greenhouse gas emissions in electric power systems. ■ To build a large-scale liquefied hydrogen plant to expand the hydrogen business Committed to carbon neutrality, Hyosung Chemical and Hyosung Heavy Industries have been proactively pursuing the hydrogen business. With an existing hydrogen charging system, Hyosung supplies a charging system for passenger and commercial vehicles and plans to provide dedicated charging stations for heavy machinery in line with the hydrogen fuelization efforts for excavators and forklift trucks. In addition, Hyosung is constructing the world’s largest liquefied hydrogen plant designed to improve the efficiency of hydrogen storage and transportation. Liquefied hydrogen offers much better efficiency in storage and transportation thanks to its higher density than that stored in the air. Hyosung plans to contribute to facilitating hydrogen mobility by proactively producing liquefied hydrogen. In response to the growing trend in sustainable mobility and transition to the hydrogen economy, Hyosung joined hands with the world’s leading gas name Linde Group to build a 13,000-ton liquefied hydrogen plant by 2023 with an estimated investment of KRW300 billion (USD215 million). It will be built on the site of Hyosung Chemical’s Yongyeon factory. ■ TANSOME®, lighter but stronger than steel Hyosung Advanced Materials developed TANSOME®, carbon fiber 10 times stronger than steel. It is one of the essential materials for producing fuel tanks for hydrogen vehicles. The carbon fiber-based high-pressure tanks are much lighter while promising better fuel efficiency. Hyosung sees a future where its TANSOME will be critical in green energy and the automobile industry where weight reduction is imperative. ■ Low carbon lyocell tire cords Hyosung Advanced Materials has developed lyocell tire cords derived from woods used for high-speed vehicles for its durability. Using materials with minimum pollution impacts, unlike conventional materials such as rayon and nylon tire cords which generate pollutants including carbon bisulfide and sulfureted hydrogen, lyocell tire cords offer 30 percent lower greenhouse gas emissions. ■ Eco-friendly engineering plastic material, polyketone Based on its proprietary technologies developed in 2013, Hyosung Chemical produces engineering plastic POKETONE™. Made of carbon monoxide (a leading cause of air pollution), Hyosung’s polyketone uses 0.5 tons of carbon monoxide for 1 kg of Poketone production. The material is approved by the US FDA for its non-toxic characteristics and thus has been widely used for kids’ toys, food processing conveyors, and cosmetic packaging. It is now being adopted in new sectors such as automobiles, electric and electronic gear, and drilling pipes. Especially, Polyketone is safe and durable for its impact and abrasion resistance, and ductility. It is a semi-permanent material that doesn’t require the replacement of components and thus offers higher sustainability than general or disposable plastic materials. As a leading eco-friendly plastic material, Polyketone also offers lower global warming potential (GWP) compared to other engineering plastics and is proven through LCA or life cycle assessment and other external reviews to be effective in reducing CO2 emission. Hyosung Chemical has expanded its application to broader areas such as building materials, automobiles, household items, and leisure goods. ■ Recycled polyester yarn created from post-consumer PET bottles, regen® With plastic waste emerging as a global issue, Hyosung TNC developed 100 percent recycled polyester yarn from discarded PET bottles ‘regen® polyester’ back in 2008. The textile powerhouse Hyosung TNC’s regen® polyester offers the same level of quality and performance as conventional polyester materials. It is loved by leading fashion names worldwide for its outstanding quality and stable supply thanks to Hyosung’s extensive global network. It also offers 60 percent less CO2 emissions than other polyester products. Hyosung TNC has been producing ‘regen® ocean nylon’ since 2007, a recycled nylon yarn from fishing net waste that accounts for a large percent of ocean waste. These eco-friendly yarns, regen® polyester and regen® ocean nylon, contribute to sustainability and circular economy by dramatically reducing landfill waste and CO2 emissions. As a leader in the circular economy for the textile industry, Hyosung offers global best practices in quality and stable supply. ■ Bio-based spandex The global number one spandex provider Hyosung TNC learned from the Life Cycle Assessment that materials before they are put into the manufacturing process, have the biggest environmental impact. To address this, the company has developed bio-based spandex to supply them for global leading fashion brands. It is currently working on biodegradable polyester yarn development as part of its effort to diversify its bio yarn portfolio. 3) Sustainable corporate culture In 2021, Hyosung ran an internal idea competition for energy saving and greenhouse gas reduction. Out of the 211 ideas submitted, ranging from energy consumption saving in business sites to product development, 10 passed the thorough deliberation process, and the selected ones have all been implemented to reduce greenhouse gas emissions. Assembly lines at Hyosung TNC are all in the process of transitioning to low carbon energy consumption. It uses waste supplied from incineration facilities nearby as a renewable energy source while using biogas produced from an anaerobic digestion system installed in its factories. Hyosung also ran an internal campaign last year to do away with disposable goods in the workplace. Since 2021, paper cups for water coolers in the company have been removed, and instead, it supported employees’ purchase of tumblers. In 2020 alone, it is estimated that around 190,000 paper cups were used at the headquarters of Hyosung TNC. Thus, we believe that by simply cutting down on our use of paper cups daily, we can reduce our CO2 emissions by up to 2 tons per annum. 4) Enhancing stakeholder trust Hyosung has shown an outstanding performance in the CDP (Carbon Disclosure Project) scores, the most trusted assessment of businesses’ climate change response. In the 2020 CDP Climate Change Awards, Hyosung Advanced Materials was awarded Carbon Management Honors Club, an award for the top five performers, and Carbon Management Sector Honors for the top-notch CDP scorers in respective sectors. CDP is a not-for-profit organization based in London, UK, that discloses environmental impact information such as climate change strategy, CO2 emission, and carbon management of major listed businesses in 91 countries. What we have here is just part of a much larger story regarding Hyosung’s commitment to sustainable management. We at Hyosung believe the future for a fully sustainable Hyosung is just around the corner, with all members of the Hyosung family being committed to a better life for humanity. Hyosung continues to trailblaze daily to honor its carbon reduction commitment to identify sustainable new growth engines and protect our environment.

Did you know that the Republic of Korea was the first country to legislate a hydrogen law in the world? Yes, the Korean government promulgated the Hydrogen Economy Promotion and Hydrogen Safety Management Act or the “Hydrogen Act.” Yet Korea is not alone. The world is spotlighting hydrogen energy; an energy source recently sought after the most in the world. The U.S. Department of Energy has also announced the Hydrogen Program Plan, while U.S. President Biden promised a $9.5 billion fund to cut clean hydrogen costs and facilitate commercialization. The EU also has revealed the EU Hydrogen Strategy and launched the European Clean Hydrogen Alliance (or ECHA) as part of its efforts to transition to the hydrogen economy. China aims to meet a target of 1 million hydrogen vehicles by 2030. What is it about hydrogen that makes it so much in demand? More energy efficiency, lower greenhouse gas emission The answer lies in its eco-friendly and economic characteristics. With the growing call for doing away with fossil fuel usage to save our ailing earth from greenhouse gas, demand for electricity as an alternative to fossil fuels soared. Electricity can be generated by clean energy sources such as solar and wind power. However, they require huge installation space and are susceptible to climate conditions. That is where hydrogen comes in. Unlike underground resources, hydrogen can be artificially produced with technology. It is the most abundant element in the universe, accounting for about 75 percent of its mass. It is a clean energy source that makes water when mixed with oxygen. It has the highest energy density of all known substances, promising excellent energy efficiency. One might wonder. How come it takes so long for humanity to start utilizing it despite all the merits it offers? Re-emerging as a promising energy resource Humanity has long known about the possibility of hydrogen as an energy resource. When Apollo 11 made the first landing on the moon, it housed three hydrogen fuel cells. Hydrogen emerged as a promising energy resource in 1973 when the oil crisis hit the world. With the shale oil boom, however, hydrogen was put on the back burner. While humanity was preoccupied with the low-price and fast development of energy resources without considering environmental consequences, the earth’s ecosystem has been collapsing rapidly. It has come to the point where the development of alternative energy resources for the sake of the environment and humanity can no longer be put on the back burner. Thus, hydrogen is rapidly gaining ground. Now efforts are being put forth to find ways to use hydrogen in a more efficient and eco-friendly manner before the world transitions into a hydrogen economy. Hyosung’s hydrogen business will provide the most idealistic way of utilizing the promising energy resource that could be a definitive answer to humanity’s present and future. Hyosung is committed to hydrogen The biggest stumbling block to the commercialization of hydrogen is the lack of charging infrastructure. No matter how efficient and eco-friendly it is, not many people will be ready to opt for the energy resource. In other words, they are going through a great deal of inconvenience due to the lack of supporting infrastructure, such as charging stations. As such, Hyosung has been taking the lead in establishing a charging station network nationwide to facilitate our national paradigm shift into hydrogen. Starting from CNG and LCNG charging facility businesses in 2000, Hyosung has built its gas compression and charging technology and experiences over the past two decades. Building on this, Hyosung introduced the nation’s first hydrogen charging station in 2009; it is a leading supplier of hydrogen charging stations in Korea, with 25 operating in major cities and 16 in the pipeline. When it comes to nylon liner resins and carbon fibers, the essential materials for hydrogen storage containers, Hyosung is the main supplier. Storage of hydrogen requires high-pressure and ultra-light containers. Hyosung TNC has developed and supplied Nylon liner resin for the first time in Korea. Hyosung Advanced Material’s proprietary carbon fibers, the fourth of their kind in the world weigh a mere 1/4 of that of heavy steel and 10 times the strength, suitable for hydrogen storage containers. Carbon fibers are also used for tanks for hydrogen vessels. Hyosung is to invest KRW1 trillion by 2028 to build an annual capacity of 24,000 tons to meet the growing demand for hydrogen cars. The future of hydrogen will run alongside Hyosung’s hydrogen business As with anything in life, there is always room for improvement. Hydrogen is no exception. It is a gas. When it is in gas form, its volume is huge, and it has to be stored at high pressure for efficiency’s sake. To store the high-pressure hydrogen gas stably, specially designed containers are required. Should the volume and weight of the gas increase, transportation costs and establishing charging stations would inevitably become challenging. However, when it is cooled down to minus 253 degrees, it becomes liquid, called liquid hydrogen. Its volume is 1/800 that of gaseous hydrogen, which in turn requires less landmass for charging stations and lower costs for related facilities and transportation. It is also stored at atmospheric pressure with higher stability. On top of this, charging is more convenient and easier as it doesn’t ascertain levels of pressure during charging – the same way as you would fuel a gasoline vehicle in a gas station. As such, liquid hydrogen is the key to a rapid transition to hydrogen energy. Hyosung has partnered with a global gas leader Linde Gas to build a liquid hydrogen plant to equip it with the liquid hydrogen production and charging network enabling large-scale storage and transportation. The plant, once built, is expected to kick off its operation by May 2023 in Ulsan, Korea, with a capacity of over 13,000 tons of liquid hydrogen. Upon launching the facility, Hyosung plans to invest KRW 1 trillion over five years to expand it to a capacity of 39,000 tons per annum. Once the distribution of liquid hydrogen grows, it will naturally be followed by a rapid establishment of related infrastructure. As the cost of building charging stations gets cut, the saved-up funds can be funneled to build more stations. Hyosung is to establish a 30 liquid hydrogen charging station nationwide with the planned launch of the liquid hydrogen plant. A greener hydrogen eco-system It would be difficult to call hydrogen a true clean energy resource if its production process had entailed carbon dioxide emissions. Hyosung strives to develop the CCUS (Carbon Capture Utilization Storage) technology that captures carbon dioxide emissions at production. The company is also leading the influx of the green hydrogen supply, produced by an electrolyzer based on renewable energy. It does not emit any carbon dioxide during the production process, and thus it is called the ‘ultimate green hydrogen.’ As the first Korean company to develop a 750kw wind turbine, Hyosung is also planning to build an 8MW wind farm. When it comes to new and renewable energy, storage of produced energy is critical as it is vulnerable to surrounding environments such as climate. Hyosung is also a leading player in ESS or Energy Storage System in Korea. A new era ushered in by hydrogen The Hydrogen Council, a global initiative of leading companies, estimates up to 546 million tons of global hydrogen consumption by 2050, which will replace 13.26 billion barrels of crude oil and account for nearly 20 percent of the global energy demand. Hydrogen stands to determine the future of humanity and the environment, and Hyosung has played and will continue to play a key role in our transition to a hydrogen society. As a holistic supplier responsible for the whole value chain encompassing production, transportation, and charging, Hyosung has been trailblazing the global industry. Please stay tuned with us while we at Hyosung continue to march into a new era of hydrogen!