What should South Korea do?
Enhance its NDC to be 1.5 degree aligned by COP26:
- Revise the current coal phase out year, which stands at 2050, and plan for an early closure of coal plants by considering a coal retirement mechanism that stakeholder companies would accept.
- Create a fair and flexible market for renewables – allow for Power Purchase Agreements (PPAs) and lower the premium, loosen and deregulate the permitting of sites for wind turbines and solar panels.
- Discontinue new issuance of public oil and gas finance and avoid potential ‘gas lock-in’ created by stranded assets in the long run, especially in the upstream and midstream value chain (LNG carriers and shipping).
- If the hydrogen economy plan, which relies heavily on fossil fuels, is carried out as is, South Korea is expected to be in breach of the Global Methane Pledge, which it joined last year. If the current hydrogen economy plan is carried out, an additional 183 kilotons will be emitted on top of existing emissions – nearly half the amount promised to be reduced under the pledge.
- Phase out current carbon intensive steelmaking route domestically and overseas and accelerate the country’s steel industry decarbonization.
- Must consider renewable investments prior to resorting to nuclear. As stated in the IPCC WG III Report from April 2022, the nuclear option is a cost-ineffective alternative to fossil fuels, compared to renewables.
Build a just and resilient recovery plan:
- Invest in renewable & green transport to boost economy to create jobs
- Set a net zero timeline and make an official announcement on stopping coal investments; promote shift from ICE to EVs
- Develop measures or policies for heavy industries and fossil fuel sectors, in line with emissions reduction targets and recovery plans
What you need to know about South Korea?
- Korea updated its NDC in December 2021, enhancing its 2030 target from the previous 24.4% reduction compared to the 2017 level (26.3% reduction from the 2018 level) up to 40% reduction from the 2018 level.
- The National Committee on Climate Change and Air Quality (NCCA) has advised the Korean government to phase out coal earlier than 2040/2045 back in 2020.
- South Korea was the first in the Asian region to announce the moratorium of overseas public coal finance as early as April 2021.
- Subnational governments are playing an active role in pressuring the central government to join the PPCA and rapidly phase out coal.
- The export centric economic model with 10 major corporations, responsible for 80% of national GDP, makes the industry sector highly sensitive to market demands – this is illustrated in the growing number of Korean RE100 members. In September 2022, Samsung Electronics joined RE100.
Recent developments, threats and levers for action
- In March 2022, South Korea elected its former Prosecutor-General Yoon Seok-Yeol of the opposition conservative People Power Party as its next president with 48.56% of the popular vote. Yoon’s climate agenda will reset the preceding government’s nuclear phase out policy and resume construction of the Shinhanwool 3, 4 power plants to be completed by July 2023.
- Korea will be announcing its 10th Basic Energy Plan by March 2023, and the renewable proportion of the energy mix will be decreased from the previous Moon administration’s 30% by 2030.
- The Framework Act on Carbon Neutrality and Green Growth enshrines carbon-neutrality by 2050 in law. In October 2021, Korea released the 2050 carbon neutrality scenarios, including roadmaps on a sector-level and suggestions for possible policy measures.
- Global corporates across the electronics and automobile sector sensitive to market trends
- Progressive subnational government actors (e.g. South Chuncheon, Seoul, Gyeonggi, Gangwon, Incheon, Jeju, South Jeolla and Daegu) have joined the Powering Past Coal Alliance.”
- Heavy siting regulations and barriers for wind and solar businesses based locally and overseas to enter the Korean market.
- The industrial structure is still highly carbon-intensive and Doosan Heavy industries produce coal turbines, driving overseas coal projects
- Vertically bundled and regulated monopoly power sector run by the national utility.
- Transition plans of existing domestic and overseas coal plants into LNG plants.
- Widespread acceptance of gas as a bridge fuel for energy transition could lead to “gas lock-in”
- Transition risk in the midstream stemming from shipbuilding.
- Excessive siting and permitting regulations hindering expansion of renewables along with barriers for direct PPAs.
- Over-reliance on expensive nuclear as a dominant fuel in the energy mix.
About Climate Diplomacy Snapshots
The data is clear. Accelerated and enhanced action is needed now to build resilience and avoid the worst impacts of climate change. As they seek to address the ongoing health, economic and social impacts of COVID-19, governments should seize opportunities to invest in a recovery that will build social, economic and climate resilience on the long-term. The Climate Diplomacy Snapshots aim to provide the climate community with a clear overview of what each country should do, on climate and recovery, to pursue these joint objectives and keep the global average temperature increase to 1.5°C. Each has been prepared with the help of national experts, and will be regularly updated. The snapshots aim to support climate advocacy in the lead up to COP26.