South Korea to phase out coal, ramp up renewables, in new blow to Australian exporters

South Korea will phaseout coal by the 2040s with an announcement at COP30 that the largest two-way trading partner will be joining a 60-strong bloc of countries working to end use of the fossil fuel.

Korean Minister of Climate, Energy and Environment Kim Sung-whan officially announced the decision in Belem that would commit to decommissioning 61 of its coal fired power plants.

Of these, 40 already have closure dates with closure dates for the rest to be determined “based on economic and environmental feasibility after publication discussion” with a specific plan scheduled to be produced next year.

“In the long term, Korea envisions a system where renewable energy serves as the primary power source, supported by nuclear as a complementary source; coal is fully phased out; and gas functions mainly as an emergency power source,” Kim said.

“Through this, we plan to move toward a fully decarbonised, green economy.”

Kim acknowledged that Korea’s renewable energy deployment has been “relatively modest in the past” but said his government intended to “aggressively expand wind and solar power, along with related industries such as energy storage and grid technologies.”

The decision comes after Korea faced criticism in previous years for signing a pledge to phaseout coal by the 2030s in Scotland, but backtracking in 2021 to say that it only signed onto a plan to “working” on how to phaseout coal.

South Korea draws almost a quarter – 22.3% – of its energy supply from coal, according to the International Energy Agency, with the country ranked fourth biggest importer in the region.

Australia is a major exporter of coal to Korea, both for power production and metallurgical coal used in making industrial products like steel, shipping 2.7m tonnes of coal in August. At that time congestion in Australian ports saw Russia and Indonesia overtake Australia to become the biggest exporters.

Adam McGibbon, a campaign strategist at Oil Change International welcomed Korea’s decision with the caveat that the country has “yet to take any serious action on oil and gas”, noting that it continues to use public-finance to invest in new fossil fuel projects.

“Between 2020 and 2022, Korea financed an average of $10 billion per year in overseas fossil projects, while only providing $850 million per year in finance to renewable energy projects,” he said.

Korea, along with Japan, have been responsible for underwriting a massive expansion of Australia gas production thanks to state-directed investment that has enabled these projects to get off the ground.

Japan and Korea contributed at least $20.5 billion to key Australian gas projects between 2008 and 2014, with just over two thirds – 64% – provided by Japan’s export credit agency JBIC.

Where Japan’s investments tend to involve primary production, Korea’s investment has been more focussed on transport.

If you would like to join more than 28,000 others and get the latest clean energy news delivered straight to your inbox, for free, please click here to subscribe to our free daily newsletter.