A case study on the assessment of
environmental impact of ICT services in Korea
Hyosik Min
Environmental Strategy Manager
CSR Office
SK Telecom
May 2012
Contents
I. SK Telecom Overview
II. Background and introduction
III. Approach and methodology
IV. A case study: Real-time Navigation (RTN)
V. ICT GHG potential abatement in Korea
VI. Introduction to Further Study
1
Section 1
SK Telecom Overview
SK Telecom Overview
SK Telecom is the leading telecommunication company in Korea
and has launched a lot of innovative services
Cutting edge Tech. and Servces
’84
’96
AMPS
CDMA
CDMA
2000 1X
’02
EVDO
’06
HSDPA
TD-SCDMA
Test-bed
HSUPA
‘11
LTE
World’s Most Innovative Companies
Ranked 91st
One of two Telco companies selected
(April 2005)
Real Time
Navigation
e-Commerce
Together
Movie & With
Video ShareholdersMusic
Game
WiMax
’07
Award & Recognition
Mobile Money
OnlinePortal
Mobile Portal
Mobile
SNS
Cloud Service
Winner of “National Customer
Satisfaction Index”
1st Place for 14 consecutive years
(October 2011)
“Best Asia Telecom Carrier”
Awarded two consecutive years
(Telecom Asia & IDC, April 2007)
DJSI world
Sector leader in
Mobile Telecommunications
Telecommunication Market in Korea
Korea has fast growing mobile communication market and
SK Telecom has continued its sustainable growth
Mobile subscriber
Selected key figures of SK Telecom
(As of Dec. 2011)
Revenue
Operating
gain
Net income
EBITDA
Number of
subscribers
Market
Share
$ 13,783M
$ 1,837M
$ 1,363M
$ 3,895M
26.6 million
50.6%
SK Telecom’s Environmental Management Strategy
SK Telecom established companywide strategy for environmental
management to actively respond to environmental issues
Response to
Climate Change
Reduction of
Social GHG
Emissions(SE)
Establishment of
an Eco-Friendly
Corporate
Culture
Comply with all demestic
requlations related to GHG
reductions
Recognize the effects of the
country’s GHG reductions
through ICT
Stabilize the company’s
environmental management
system and reach a
consensus among employees
Section 2
Background and Introduction
Background
Importance of ICT toward GHG emission abatement has been
studied globally
Gartner report, 2007
“ ICT Industry is responsible for
2% of global carbon emissions
”
GeSI: <SMART 2020>, 2008
“ Identified global emissions
abatements in 2020 is five times
of its own footprint
”
7
Introduction
“A study on social GHG abatement by the use of ICT”
The purpose of the study was to;
Demonstrate the potential GHG abatement of “Green by ICT”
solutions in Korea between 2011 and 2020.
The scope of the study included;
Role of ICT in climate change mitigation in national level;
Contribution of ICT services to abate GHG emission;
Development of methodology to calculate GHG emission
abatement; and
Quantification of potential GHG abatement in Korea.
8
Section 3
Approach and methodology
Approach: ITU-T L.1410 Part 2
According to Part 2, we have applied Gap Analysis between
Reference Product System and Target ICT service.
First Order Effects
The impacts created by the physical existence of ICT and the involved
processes
Second Order Effects
The impacts created by the use of ICT service. This effects include the
immediate abatement or increase in GHG emission after adopting ICT services
Other Effects
As ‘rebound effects’, the impacts created by the aggregated effects that
consider time gained for end-user phase as well
Reference Product System
(Baseline scenario)
• Energy
• Fuel
Transport
Target ICT service
(Project scenario)
• Energy
• Fuel
GHG
(CO2e)
Transport
Less
GHG
(CO2e)
ICT
service
Comparisons between the systems on the basis of achieving the same functional units
10
Approach: ITU-T L.1410 Part 2
We have applied quantification formulas by categories and
secondary effects based on Part 2.
Sector
Categories
Quantification
Movement of people
Energy abatement = Unit energy consumption for each type
of fuel × Fuel consumption r educed
Movement of goods
Energy abatement = Unit energy consumption for each type
of fuel × Fuel consumption reduced
Improved efficiency of office
space
Energy abatement = Unit energy consumption × Amount
reduced
Power consumption &
Energy consumption
Energy abatement = Unit energy consumption for each type
of fuel × Fuel consumption reduced
Storage of goods
Energy abatement = Unit energy consumption × Amount
reduced
Improved work efficiency
Energy abatement = Energy consumption per m2 × Area
used per person (m2) × Workload
improved (person-year)
Consumption of goods
Energy abatement = Energy consumption to produce one
unit of the product × Amount reduced
Waste
Energy abatement = Unit energy consumption for each type
of waste × Amount reduced
Transport
Buildings
Industry
11
Scope Boundary: Analyzed 14 ICT services
3 selection criteria
1. Current
offering from ICT
industry players
3. Government’s
ICT strategy and
plans
2. Global
Benchmarking
14 ICT services for analysis
Transportation
1. Real-time Navigation
(RTN)
2. Bus Information
System (BIS)
Buildings
Commerce
7. Home Energy
Management
System (HEMS)
4. Telepresence
9. e-Commerce
10. e-Government
11. e-Municipality
3. e-Logistics
12. e-Health
8. Smart Grid
5. e-Learning
13. e-Publication
6. Smart Work
12
Production
14.Smart Motor
Methodology: 6 Steps of workflow
1
Identify the functional unit and expected second order effects
2
Define scope and boundary
3
Develop two different scenarios for comparative analysis
4
Estimate second order effects and GHG emission abatement
5
Project GHG emission abatement by year 2020
6
Aggregate GHG emission abatement
13
Section 4
A case study: Real-time Navigation
Real-time Navigation (RTN)
1t
2
3
4
5
6
1 Identify the functional unit and effects
Definition: A GPS-based service that provides real-time information of optimal
routes and traffic condition to the destination.
Functional unit: Movement of people from A to B in certain conditions such as
time and cost.
Types of Effects
Positive effects
First Order Effects
Second Order
Effects
As driving time and
distance decreases, fuel
consumption decreases
Other Effects
As life span of vehicles
increases, production for
vehicles decreases
Negative effects
Impact on
GHG emission
As usage of RTN increase,
production and network usage
for RTN increases
(+) Increase
(-) Decrease
As users’ spare time increases,
energy consumption from
other industry increases
15
(+) and (-)
Ambiguous
Real-time Navigation (RTN)
t1
2
3
4
5
6
2 Define scope and boundary
Boundary for transport
Boundary for population/consumer
Applicable vehicles for installing RTN
Possible consumers for using RTN
Non-business cars, vans, trucks and
business cars (assumed as taxis)
The LBS users among mobile internet
service subscribers
No. of vehicles that are able to install
RTN
(assumed that every possible
consumer possesses his own vehicle)
9,280,405
vehicles
Average annual travel distance per
vehicle*
14,987km
Mobile internet service
subscribers**
% of internet service subscribers
using LBS service**
19.3%
People who are able to use RTN
9,280,405
people
* 2008, Korea Transportation Safety Authority
** 2010, Korea Internet & Security Agency
16
48,085,000
subscribers
Real-time Navigation (RTN)
t1
2
3
4
5
6
3 Develop two different scenarios
Reference product system (baseline)
ICT service (project)
Impacts on travel distance and fuel consumption
while “possible consumers” don’t use RTN
Impacts on travel distance and fuel
consumption while “possible consumers”
install and use RTN
No. of vehicles that are able to
install RTN
9,280,405
drivers
(or vehicles)
Average annual travel distance
per vehicle
14,987km
Total distance travelled before
adopting RTN
% of travel distance navigated by
RTN*
16%
% of fuel reduced**
8.7%
Travel distance reduction after
adopting RTN
139billion km
* <T-map user statistics>, SK telecom
** <Nissan SKY Project> , Nissan Motor
17
2billion km
Real-time Navigation (RTN)
t1
2
3
4
5
4 Estimate the GHG abatement in base year
By adopting ITU-T quantification category “Movement of people”,
reduced travel time in 2011 after implementing RTN is;
Reduced distance by RTN
2 billion km
Actual Average Mileage
8.32km/l
Fuel saved by the reduced distance travelled
239,886.66kl
Emission factor of fuel
2.47 tCO2e/l
Emission abatement by RTN in base year
592,520 tCO2e
18
6
Real-time Navigation (RTN)
t1
2
3
4
5
6
5 Project the GHG abatement by 2020
Considering about,
Potential GHG abatement by RTN by 2020
(unit: tCO2e)
RTN service users
Travel distance navigated by RTN`
2011
2020
4,000,000
16%
70%
3,500,000
3.5 million tCO2e
in 2020
3,000,000
The number of usage per user
2,500,000
Internet service subscribers using
LBS service
2011
2020
19.3%
90%
2,000,000
1,500,000
1,000,000
Growth in automobile industry
500,000
CAGR
Growth rate of car registered
-
3.28%
19
CAGR 22%
Section 5
Potential domestic GHG abatement
Conclusion
Potential GHG abatements by adopting ICT services is expected to
be more than 5 times of its direct footprint.
2011
610
2020
BAU
793
Potential GHG abatements of ICT services
is 5.8 times of ICT’s direct footprint.
Expected GHG abatement of each
ICT services in 2020.
20
100,000,000
10,000,000
1,000,000
100,000
10,000
1,000
100
10
1
118.4
Abatements
695
Total emissions
ICT direct footprint
Abatements
14.57%
Abatement
potential
(Units: tCO2e)
Financial value via ICT services in 2020 is
expected to be about USD 72 billion in
terms of energy savings.
21
Implication
The significance of the study was;
The first case study which fully applied ITU-T L.1410 Recommendation: and
The first study on assessing GHG abatements by the use of ICT in Korea
(of Republic).
The limitation of the study was;
Absence of LCA approach for first order effect.
The recommendation for further study is;
Prioritization of 14 ICT services in terms of possibility of standardization;
Applying LCA approach for first order effect; and
Planning for developing CDM methodology.
22
Section 6
Introduction to further study
Introduction of Phase II
The scope and work streams of phase II :
Work Stream 1
Work Stream 2
Work Stream 3
Work Stream 4
Discover target
ICT services by
prioritization
Supplement
target ICT
services
Cooperate with
major global
organizations
Recommend
utilizing GHG
abatement via ICT
Possibility for global
standardization
Corresponding to ICT
services of SK
telecom
Potential GHG
abatement
2 target ICT
services based
on prioritization
Supplementing with
qualitative and
quantitative methods
(e.g. user surveys,
experiments)
Analyzing direct
impact with LCA
approach
Contributing a case
study and submethodology to ITU-T
Collaborating with
global organizations
of standardization/
telecommunication
companies
Promoting
global
standardization
of Green by ICT
Enhancement
of the limitation
in phase I
24
Suggesting
development of CDM
for ICT services
overseas
Suggesting utilizing
GHG abatement
under domestic GHG
abatement plans
Reviewing the
ways to approve
GHG abatement
Thank you
Hyosik Min
+82-2-6100-2253
hmin@sk.com
25