SK Telecom faces 357,000-ton carbon allowance shortfall as Korea tightens caps and AI data centers boost power demand

SK Telecom expects its greenhouse gas emissions to exceed its free carbon allowances by more than 357,000 metric tons in 2026, according to ChosunBiz. The company received 918,993 tons in free allowances but estimates emissions at 1,276,396 tons. This shortfall follows a sharp cut in free allocations as Korea entered the fourth phase of its emissions trading scheme, which reduced the total cap by 17% and raised the paid allocation ratio for non-power sectors from 10% to 15%. SK Telecom had built up a surplus in previous years, but that cushion is now exhausted. Rising electricity demand from AI data centers is a key driver. About 95% of SK Telecom's emissions are scope 2, tied to power consumption for base stations, network equipment, and data centers. On a consolidated basis including SK Broadband, expected emissions reach 1.94 million tons while free allocations are only 1.4 million tons. SK Broadband's emissions jumped 37.7% in one year due to new data center operations. The cost of buying allowances has also tripled, with KAU26 prices at 30,050 won per ton, putting the shortfall at roughly 10.7 billion won. The company plans to respond through energy efficiency improvements and diversified renewable energy procurement, but faces a fundamental tension between AI growth and its 2050 carbon neutrality target.