Cosmax (192820) has signed a direct Power Purchase Agreement (PPA) for solar energy as part of its push to achieve carbon neutrality by 2050. Through the deal, the company will source approximately 40% of the total electricity consumption at its domestic plants from renewable energy.
Cosmax announced Wednesday that it signed the direct solar PPA with Hanwha Solutions' Q Cells division.
A direct PPA is a contracting method in which an electricity user and a renewable energy producer trade power directly without going through the wholesale electricity market. The arrangement allows long-term contracts, providing a stable supply of power that supports both carbon neutrality and RE100 commitments. Direct PPAs have been available in Korea since 2022 to promote corporate participation in RE100.
Following final approval from its ESG Committee, Cosmax will receive about 10.4 GWh of renewable energy annually starting in July, supplying its main domestic production sites. The direct PPA covers four plants in Hwaseong and Pyeongtaek, allowing Cosmax to source roughly 40% of the total electricity used at its domestic plants from renewables.
Cosmax is also expanding its own generation facilities to scale up renewable energy use. A representative example is the addition of a 499.2 kW solar power facility on the rooftop of Building 6 at the recently expanded Pyeongtaek Plant 1. The facility is targeted to begin generation in the fourth quarter of this year and is expected to produce an additional 638 MWh of renewable energy annually. The company also operates rooftop solar facilities at 12 sites in total — six domestic and six overseas — and plans to further expand renewable energy use and upgrade its management systems across its global production network.
Cosmax is concurrently building a Life Cycle Assessment (LCA) system. LCA quantifies resource and energy use and emissions across a product's entire lifecycle — from raw material sourcing, production, distribution and use to disposal — to calculate environmental impact, and is regarded as a core management foundation for responding to global regulations and meeting carbon neutrality targets. Cosmax completed its product carbon footprint calculation process last year and plans to finalize the LCA framework covering the full product lifecycle this year. Through this, the company aims to strengthen both its renewable energy transition and its product-level environmental impact management capabilities, further advancing its climate response system to meet the standards demanded by global markets.
"The direct solar PPA is significant in that it goes beyond a declaration on climate change response and shows that our supply chain management system as a whole is being transformed to a global level," a Cosmax official said. "We will continue to expand renewable energy, innovate energy efficiency, advance our product environmental impact management system, and strengthen supply chain responsiveness to establish ourselves as the most trusted top-tier partner in the global market."
Meanwhile, Cosmax has been actively responding to climate change issues, establishing its '2050 Carbon Neutrality Roadmap' last year to upgrade its environmental management system and publishing a Task Force on Climate-related Financial Disclosures (TCFD) report. As a result, in March this year, Cosmax received the highest 'A' grade in the water management category at the '2025 Climate Change Response and Water Management Excellent Company' awards hosted by the Korea Committee of the Carbon Disclosure Project (CDP). It also became the first Korean cosmetics company to earn the top 'Platinum' rating from global ESG rating agency EcoVadis. Cosmax is also focused on minimizing supply chain risks by enhancing disclosure transparency and establishing human rights management and supply chain management systems aligned with global standards.
