The Russian invasion of Ukraine has had far-reaching consequences on the global energy market. The EU’s dependence on Russian natural gas has been laid bare since the start of the invasion and efforts to diversify energy supplies are being accelerated at an unprecedented rate in Europe. The implications of the Russian invasion of Ukraine on energy and climate policies and practices in the EU are widely known by audiences in the West, but what about countries in Asia like South Korea? What effect has the crisis in Ukraine had on energy and climate policies there?
Due to insufficient domestic resources, South Korea relies heavily on imports of fossil fuels to meet domestic demand and is consequently highly exposed to shocks in the global energy supply market.
Russia is South Korea’s fourth largest source of fossil fuels, making up almost 10% of all imported fossil fuels by the country in 2021. [1] 6% of crude oil imports and approximately 5% of its LNG imports last year came from Russia. Coal remains a major source of power generation in South Korea, (accounting for 21.8% of the country’s energy mix in 2021), 17.5% of the coal imported to the East Asian nation comes from Russia.[2] Political pressures are already building on countries around the world to wean themselves off their reliance on Russian fossil fuels. In South Korea, at least one unit of the state utility Korea Electric Power Corp (KEPCO) has halted Russian coal imports in recent months.[3]Furthermore, as the invasion loomed the South Korean finance ministry released a statement saying that the country would look to buy oil from the United States, the North Sea and the Middle East, coal from Australia, South Africa and Colombia, and gas from Qatar, Australia and the United States.[4]
At COP26 in Glasgow, South Korea committed to further reduce emissions by submitting an updated NDC with aims to reduce its GHG emissions by 40% from 2018 levels by 2030.
The effect of the crisis in Ukraine on South Korea’s efforts to promote and implement climate policies has thus far been negligible. Depending on the volatility of global energy supply chain, South Korea in the worst-case scenario may need to tap into their strategic oil reserves and stall plans to phase out coal-fired plants in order to meet domestic energy demand. In this case, the East Asian country’s ability to pursue its climate policies at the targeted rate would be hampered.
However, South Korea’s commitment to reducing its GHG emissions and to building adaptive capacities in the face of accelerated climate change remains intact. The Korean New Deal, which targets a transformation to a low-carbon and green economy, plans to invest approximately $144 billion USD in creating 1.9 million jobs by 2025.[5] The New Deal has identified renewable energy, green infrastructure and the industrial sector as priority areas. As well as this, South Korea submitted to the UNFCCC its updated NDC and 2050 Carbon Neutral Strategy. South Korea has pledged to achieve ambitious climate targets and it is already in a race against time to achieve them. The Russian invasion of Ukraine and the uncertainty of global energy supply chains may cause some bumps on the road to 2025 and beyond, but South Korea simply cannot afford to put climate change on the back burner.
In Post 49, three indicators for tracking progress in South Korea towards reducing GHG emissions by 50% by 2030 were identified.
Performance Indicator 1: Renewables share of South Korea’s Energy Mix
By year end 2021, renewables accounted for just 6.7% of South Korea’s energy mix. The country has targeted increasing the share to 20% by 2030. At the onset of the war as global uncertainty around energy supply chains led to skyrocketing prices for fossil fuels, countries like South Korea that have low energy independence have been trying to ensure that there are enough fuel reserves to meet domestic demand for the year ahead. This may have a negative impact on Performance Indicator 1 as fossil fuel use is likely to increase in the immediate period as the country seeks alternative energy supplies. However, by accelerating the shift away from reliance on Russian fossil fuels, South Korea has an opportunity to reduce its emissions and transition towards renewable energy, with a positive impact on Performance Indicator 1 as the decade progresses.
Performance Indicator 2: Number of operational coal-fired power plants in South Korea
South Korea has pledged to dramatically phase down coal-fired power plants by 2030. Coal power accounts for approximately 40% of South Korea’s electricity generation and is thus the largest single source of GHG emissions in the country. Progress is being made towards reducing the amount of coal-fired power plants in the country. However, in the short-term as oil and LNG prices rise, it has been suggested by Eui-Seok Yang, Vice President of the Energy Economics Research Institute that the number of coal-fired power plants may have to be increased to meet demand and ensure national security as the conflict persists.[6] As with Indicator 1, the threat is that progress towards reducing the number of coal-fired power plants may stall as South Korea seeks to ensure it has adequate energy reserves to meet demand for 2022.
Performance Indicator 3: Number of Hydrogen Fuel-Cell Electric Vehicles (FCEVs)
The Korean New Deal, announced in 2020, has set a target of 200,000 FCEVs to be on the road in the country by 2025. While the Russian invasion of Ukraine will not have a direct impact on Indicator 3, it can have an indirect impact by speeding up South Korea’s strategies on hydrogen. South Korea was one of the first countries in the world to publish a National Hydrogen Strategy. In light of the movement to transition away from Russian fossil fuel dependence, South Korea can look to deepen partnerships with countries that have high export potential for hydrogen such as Australia, Saudi Arabia, UAE, Qatar and Oman. A hydrogen accord between Germany and Australia has paved the way for a massive import plan that would see up to a third of imported Russian gas replaced by hydrogen in the German energy market.[7] A similar partnership could enable South Korea to speed up it plans on hydrogen and achieve targets, such as the deployment of FCEVs, set out in the Korean New Deal.
This Post was submitted by Climate Scorecard South Korea Country Manager Michael O’Neill
Resources
[1] https://thediplomat.com/2022/04/how-south-korea-can-wean-itself-off-russian-fossil-fuels/#:~:text=Across%20all%20fossil%20fuels%2C%20Russia,percent%20of%20its%20LNG%20imports.
[2] https://energytracker.asia/the-main-barriers-to-the-renewable-energy-transition-in-south-korea/
[3] https://www.reuters.com/world/asia-pacific/japan-s-korea-coal-users-cut-russian-imports-seek-alternatives-2022-04-07/
[4] https://www.bloomberg.com/news/articles/2022-02-25/south-korea-preparing-for-energy-supply-crunch-on-russian-attack
[5] https://www.undp.org/blog/south-koreas-green-new-deal-year-transition
[6] https://www.korea.kr/news/contributePolicyView.do?newsId=148899927
[7] https://www.rechargenews.com/energy-transition/e-on-and-fortescue-plan-australia-germany-hydrogen-bridge-to-substitute-russian-energy/2-1-1193231