South Korea has long been one of Asia’s biggest importers of oil and gas, and its climate policy has often been judged by what it spent on cutting that dependence. On Wednesday 7 October, Seoul put a figure on it: 1,000 trillion won, about US$747 billion, for a green industrial strategy running to 2035.
The government unveiled the Korean-style Green Transformation, or K-GX, strategy at a national briefing presided over by President Lee Jae-myung. It names ten industries for domestic build-out: electric vehicles, batteries, solar, wind, small modular reactors, power equipment, power semiconductors, heat pumps, hydrogen and carbon capture.
The headline number needs reading carefully. By 2035 the government will commit 200 trillion won in fiscal funds and more than 790 trillion won in climate finance, delivered as loans and guarantees from five policy finance institutions, including the Korea Development Bank and the Industrial Bank of Korea. Private companies are committing a further 220 trillion won to signature projects. Most of the total, in other words, is lending capacity rather than money from the state budget.
The targets are specific. The government wants 100 GW of renewable capacity by 2030 and electric and hydrogen vehicles above 70% of new vehicle sales by 2035. Tandem solar cells are due to be commercialised by 2028. For manufacturers, the main instrument is a domestic production tax credit covering solar, wind and battery storage, backed by special regulatory zones and fast-track licensing. The Climate Response Fund will grow to 7.6 trillion won next year from 2.6 trillion won this year.
Heavy industry is also covered. The plan centres on decarbonising five greenhouse-gas-intensive industries (steel, petrochemicals, cement, semiconductors and displays) and nurturing the ten green industries. A world-first demonstration of 300,000-tonne-scale hydrogen-based steelmaking is planned for 2030.
Lee framed the plan as a response to trade pressure. He pointed to rising carbon-related trade barriers, including Europe’s carbon border levy, and to foreign buyers demanding emissions cuts from suppliers. He also said: “We are no longer in a situation where we must give up either the environment or growth.” SK Group Chairman Chey Tae-won, who leads the private-sector side of the joint task force, said the strategy was designed jointly by government and business from the outset.
Not everyone is convinced the numbers are as firm as they look. A Seoul Economic Daily editorial said the government must clarify the 1,000 trillion won in funding, and warned against confusing the supply of policy finance with actual investment, or presenting corporate plans as a government achievement. Another analysis noted that the vehicle and battery targets imply sustained demand for lithium, nickel, cobalt and other metals, though Seoul has not detailed how it will source them.
How much of the policy-bank lending will be taken up by borrowers, and how the 100 GW of renewables will be connected to the grid, have not yet been set out.
