Hyundai revokes MoU with Adaro Minerals' coal-powered aluminium smelter over climate concern outcry by K-Pop fans

The Hyundai Motor Company has announced its decision to cancel the Memorandum of Understanding (MoU) it had in place to procure aluminium from the new 1.1GW coal power plant-powered smelter in North Kalimantan, Indonesia. This plant is operated by Adaro Minerals, a subsidiary of Adaro, the second-largest coal mining company in Indonesia.

This move by Hyundai comes a year after the launch of the "Hyundai, Drop Coal" campaign by the fan-driven climate platform Kpop4Planet in March 2023. Over 11,000 K-pop fans had signed a petition urging Hyundai to withdraw from the agreement and opt for materials manufactured from renewable energy sources, particularly solar and wind, for their car production in Indonesia.

By shifting to renewable energy sources like solar and wind, the aluminium industry can drastically reduce its carbon footprint and mitigate the impacts of climate change. This transition helps achieve sustainability goals and promotes a cleaner and greener future for generations to come. Additionally, using renewable energy for aluminium production can lead to cost savings in the long term, making it a win-win solution for both the environment and businesses.

Should Hyundai proceed with its original plan to purchase 50,000 to 100,000 tonnes of aluminium annually from this smelter, as outlined in the initial Memorandum of Understanding (MoU), it would lead to an increase of 3-6 per cent in Hyundai's Scope 3 emissions, as highlighted by Market Forces. Hyundai has publicly committed to achieving carbon neutrality by 2045.

"Following the expiry of the MoU at the end of 2023, both companies have decided not to renew it and to explore other opportunities independently. Hyundai Motor Company remains steadfast in its dedication to the responsible and sustainable sourcing of materials, ensuring the utmost transparency in our manufacturing processes," said Hyundai Motor Company headquarters in Seoul.

Adaro's aluminium production relies on coal from a newly constructed power plant despite the smelter's location within a designated 'green industrial park' in Kalimantan, Indonesia. According to estimates from Market Forces, a climate activist group focused on engaging investors, the coal plant is projected to emit around 5.2 million tonnes of CO2 equivalent per year.

"We are profoundly grateful for the solidarity shown by ARMY in supporting the people of Indonesia, particularly supporting those in North Kalimantan. We hope Hyundai will continue its collaboration with BTS, advocating for truly sustainable EVs that don't use fossil fuels harming our Earth," said Shifra Lushka, Community Leader of BTS ARMY Indonesia Amino.