What should South Korea do?
Enhance its NDC to be 1.5 degree aligned by COP28:
- Revise the current 2050 coal phase out year to 2030, 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 green premium, loosen and deregulate the permitting of sites for wind turbines and solar panels.
- South Korea needs to phase out gas in the power sector by 2034 to be on a 1.5 degree compatible pathway, and there can be no new gas power stations or coal-to-gas conversions.
- As the 3rd largest LNG importer, South Korea should encourage domestic oil and gas companies to join the Oil and Gas Methane Partnership (OGMP) to reduce fugitive emissions
- Build a methane action plan including yearly methane reduction targets until 2030 in line with the Global Methane Pledge.
- Announce a public finance moratorium on new blast furnace (BF) construction and BF relining, and publish a steel sector reduction target.
- Join the Industrial Deep Decarbonization Initiative (IDDI) to enchase efforts on demand-side market creation for low-carbon steel and other industrial materials.
- Revive at least 30% renewables in the power mix by 2030
- Accelerate investment into zero emission fuels and transition away from fossil fuels, including LNG, in order to cope with the IMO’s strengthened GHG policies
Build a just and resilient recovery plan:
- Invest in renewable & green transport to boost economy to create jobs
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.
- Korean Ministry of Trade, Industry and Energy (MOTIE) announced KRW 150 billion in funding for low carbon steel technology development and facility conversion.
- 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 2023, there has been a 20% increase in Korean-headquartered membership to RE100.
- South Korea is the third largest financier of international public finance to fossil fuels, spending around USD 7 billion on coal, oil and gas per year
Recent developments, threats and levers for action
Recent developments
- In February 2023, South Korea became the first Asian country to announce a government-level ‘2050 international shipping net-zero target’. The Ministry of Oceans and Fisheries also announced interim targets of 60% carbon reduction by 2030 and 80% reduction by 2040, compared to 2008 international bunkering base level.
- The 10th Basic Energy Plan, released in January 2023, increased the generation share from nuclear energy from 25% to 32.4%. President Yoon must consider renewable investments prior to resorting to nuclear. Two new nuclear power plants, Shinhanwool 3 & 4 just started ground work with construction to begin soon
- The 10th Basic Energy Plan also significantly cutting down the 2030 renewable generation target from 30.2% to 21.6%. Coal and ammonia co-firing and LNG-based hydrogen generation is also planned to expand, reaching up to 7.1% of the energy mix by 2036.
- In April 2023, South Korea and the UK agreed on a partnership to boost energy security and the use of renewables, including greater collaboration on offshore wind.
- A new coal power plant, Gangneung Anin, comprised of 2 units (2.08GW), completed construction in May 2023. Another new coal power plant, Samcheok Blue Power, comprised of 2 units (2.1GW), is currently under construction and scheduled to begin operations in 2024
Strengths
- Domestic businesses and global corporations with parts of their supply chain in Korea are ramping up their interest in removing barriers to RE procurement
- Progressive subnational government actors (e.g. South Chuncheon, Seoul, Gyeonggi, Gangwon, Incheon, Jeju, South Jeolla and Daegu) have joined the Powering Past Coal Alliance.”
Opportunities
- President Yoon’s time in office from 2022-2027 will be critical to set Korea on a trajectory to meet its 2030 NDC targets.
- Korea could join the PPCA as a country member, as its subnational governments have been calling for.
- To demonstrate effective and ambitious climate leadership, President Yoon must deliver an accelerated coal phase-out date before the next national electricity plan is announced in 2025
Weaknesses
- Heavy siting regulations and barriers for wind and solar businesses based locally and overseas to enter the Korean market.
- Steel production remains heavily reliant on coal, with 70% of domestic steel production coming from coal-based
- Vertically bundled and regulated monopoly power sector run by the national utility.
Threats
- Transition plans of existing domestic and overseas coal plants into LNG plants.
- Rise of false solutions, such as blue hydrogen and ammonia co-firing.
- 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, the Ukraine-Russia war and growing climate change impacts, 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 COP28.