South Korea has announced a 1,000 trillion won ($747 billion) energy transition and decarbonisation strategy aimed at expanding renewable energy, transforming heavy industries and creating new sources of economic growth through 2035.
The K-GX (Korea-Green Transformation) initiative includes 200 trillion won in government spending, more than 790 trillion won in climate finance and an additional 220 trillion won in private-sector investment, Finance Minister Lee Hyoung-il said during a presentation attended by government officials and business leaders.
President Lee Jae Myung said South Korea should use its technological capabilities to become a leader in the global green economy rather than follow other countries.
“We must move away from the practice of chasing others and become architects and leaders of the green market ourselves,” Lee said.
Renewable Energy Expansion and Industrial Transformation
The government plans to increase renewable energy capacity to 100 gigawatts by 2030 while supporting strategic industries including green steel, batteries, solar power, wind energy, hydrogen and small modular reactors.
South Korea also aims for electric and hydrogen-powered vehicles to represent more than 70% of new vehicle sales by 2035 as part of efforts to electrify transportation and reduce emissions.
The strategy focuses on accelerating decarbonisation across the country’s five highest-emitting industries:
- Steel
- Petrochemicals
- Refining
- Cement
- Semiconductors and displays
At the same time, the government plans to promote 10 green industries, including electric vehicles, power semiconductors and carbon capture technologies.
South Korea Targets Green Steel Leadership
The government said it wants South Korea to become a global leader in green steel by becoming the first country to mass-produce hydrogen-reduced steel.
The strategy also includes support for advanced battery technologies, small modular reactors and next-generation clean energy industries.
South Korea plans to commercialise tandem solar cells by 2028 and establish domestic supply chains for critical clean energy technologies.
Climate Strategy as an Economic Growth Driver
Climate Ministry officials said the initiative is designed to address increasing climate risks, energy security concerns and stricter global carbon regulations while turning carbon neutrality efforts into a new driver of economic growth.
Projects receiving climate finance support will be evaluated based on their greenhouse gas reduction impact. The government will also create sector-specific decarbonisation roadmaps to help achieve South Korea’s 2035 emissions targets.
Government Seeks Private Sector Participation
SK Group Chairman Chey Tae-won, who leads the private-sector advisory group supporting the initiative, said the K-GX strategy shows the government’s commitment to sharing investment risks with businesses.
According to Chey, companies have been hesitant to make long-term carbon neutrality investments due to uncertainty around technology, markets and future policies.
The government hopes the large-scale investment plan will accelerate clean technology development while strengthening South Korea’s position in emerging global industries.
