South Korea is stepping up its transition to clean energy as the government and major industrial players intensify efforts to reduce emissions, strengthen energy security, and maintain global competitiveness.
With manufacturing at the core of its economy, South Korea’s decarbonisation strategy now blends large-scale investment, renewable deployment, and innovation in carbon-neutral technologies.
Renewables Gain Momentum
The Ministry of Trade, Industry and Energy (MOTIE) reports that renewable energy accounted for 23.5 percent of electricity generation in 2024, up from 20 percent the previous year. Solar remains the dominant source, particularly in residential and industrial zones, while offshore wind is emerging as a long-term pillar of Korea’s clean energy strategy.
The Ulsan Floating Offshore Wind Project, one of the largest of its kind in Asia, is expected to add 1.4 GW of capacity once operational in 2027. Three additional coastal wind farms are in the permitting phase, supported by joint ventures with European developers.
“Renewables are no longer optional—they are central to Korea’s national resilience,” said Minister Ahn Duk-geun of MOTIE.
Hydrogen and Energy Storage Lead the Next Wave
South Korea continues to invest heavily in hydrogen, aiming to become a global leader in fuel cell technology and green hydrogen imports. The Hydrogen Economy Roadmap 2040 targets 6.2 million hydrogen vehicles, 15 GW of fuel cell power generation, and extensive hydrogen refuelling networks.
Partnerships with Australia and the Middle East are expanding South Korea’s access to green hydrogen, while domestic firms such as Hyundai, Hanwha, and POSCO are developing hydrogen-powered mobility, steel production, and energy storage systems.
Battery innovation is another core driver. LG Energy Solution and SK On are upgrading production capacity for solid-state and high-density batteries, supporting both domestic industry and global EV supply chains.
Decarbonising Heavy Industry
Korea’s industrial sector—responsible for nearly 37 percent of national emissions—has become the focus of aggressive decarbonisation measures.
Steel giant POSCO is piloting hydrogen-based direct reduction technology, aiming to replace coal-powered blast furnaces by 2040. Early trials have achieved a 25 percent emissions reduction, marking a critical step toward green steel production.
Chemical manufacturers are adopting electrified heating systems and carbon-capture solutions. Meanwhile, semiconductor producers such as Samsung Electronics and SK Hynix are implementing renewable energy procurement and energy-efficient chip fabrication processes.
Policy Support and Market Incentives
The government has strengthened policy frameworks to accelerate the shift. The K-Taxonomy for Sustainable Financenow directs capital toward green industries, while the Carbon Neutrality Act mandates binding emissions targets across all sectors.
The Emissions Trading Scheme (ETS)—Asia’s first national carbon market outside China—has expanded coverage, raising prices and incentivising cleaner production.
Public and private investment in green technologies exceeded US$32.5 billion in 2024, supported by green bonds and ESG-linked financing through the Korea Development Bank and major commercial lenders.
Outlook: A Competitive, Low-Carbon Future
South Korea’s energy transition is reshaping its industrial landscape. As global markets tighten climate regulations, Korean exporters—from steel to semiconductors—face mounting pressure to reduce their carbon footprint.
The combination of renewable power expansion, hydrogen innovation, and industrial decarbonisation positions South Korea to compete in a low-carbon global economy, while bolstering energy security in a volatile geopolitical environment.
The road ahead will require persistent investment and stable policy direction, but the vision is clear: a green industrial powerhouse rooted in innovation and resilience.
