{"id":7301,"date":"2021-10-18T03:00:22","date_gmt":"2021-10-18T03:00:22","guid":{"rendered":"https:\/\/energytracker.asia\/?p=7301"},"modified":"2021-11-04T01:36:17","modified_gmt":"2021-11-04T01:36:17","slug":"the-risks-of-the-continued-reliance-on-oil-and-gas-in-south-korea","status":"publish","type":"post","link":"https:\/\/energytracker.asia\/the-risks-of-the-continued-reliance-on-oil-and-gas-in-south-korea\/","title":{"rendered":"The Risks of the Continued Reliance on Oil and Gas in South Korea"},"content":{"rendered":"
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At first glance, the recent green energy pledges in South Korea show that the nation is finally turning a corner. The Green New Deal, the commitment<\/a> to help developing countries with their green recoveries and the ambition to become a global leader in EV battery production<\/a> are all promising signs for the country\u2019s net-zero future. However, when looking under the surface, not everything may be going according to plan. The oil and gas industry in South Korea is not only here to stay but projected to grow. Many see fossil fuels as transition fuels towards a renewable energy powered future.<\/p>\n\n\n\n

The Dominance of Oil and Gas in South Korea<\/strong><\/h2>\n\n\n\n

According to the Korea Energy Economics Institute (KEEI)<\/a>, oil and gas have a collective share of over 60% of the country\u2019s total energy supply. In comparison, the share of renewables<\/a> floats around 6.0%. However, the country wants to change. As a part of its Green New Deal<\/a>, South Korea aims to generate 20%<\/a> of its power with renewables by 2030.<\/p>\n\n\n\n

In terms of electricity production<\/a>, coal is the leading source, responsible for 36%, with oil and gas trailing closely at 30%. Furthermore, between 2001 and 2019, gas generation surged 370%.<\/a><\/p>\n\n\n\n

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The Electricity Mix of South Korea, Source: Ember Climate<\/a><\/em><\/figcaption><\/figure><\/div>\n\n\n\n

National and Corporate Interests in LNG are Growing<\/strong><\/h3>\n\n\n\n

Recent trends both on a national, corporate and international level show the shift toward LNG is increasing opposed to decreasing in South Korea.<\/p>\n\n\n\n

One of South Korea\u2019s largest conglomerates, SK Group, in November 2020 stated an aim to abandon new fossil fuel investments<\/a>. However, accusations of greenwashing were directed at the company after funding a USD 1.4 billion LNG project<\/a>. <\/p>\n\n\n\n

South Korean financiers are also turning their attention to gas. GS Energy Corp announced that it would invest in a 3 GW LNG project<\/a> in Vietnam.<\/p>\n\n\n\n

Nationally, under the nations Ninth Basic Plan, gas power capacity<\/a> will hit 40% totalling 57 GW by 2030 and 59 GW in 2034. Furthermore, several coal units will undergo conversion to run on natural gas reaching a 8 GW converted capacity by 2030<\/a>.<\/p>\n\n\n\n

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Is South Korea Going Coal-to-Clean or Coal-to-Gas, Source: Ember Climate<\/a><\/em><\/figcaption><\/figure><\/div>\n\n\n\n

The Ninth Basic Plan calls for the closure of 20 coal plants by 2034<\/a>, in addition to the 10-coal plants scheduled for closure in its previous edition. It also reveals the government’s intention of adapting 24 state-owned coal units to run on gas with a 12.7 GW capacity. Plans like these suggest that South Korea sees gas as a centrepiece of its clean energy transition. However, faith in gas threatens to derail the country\u2019s climate commitments.<\/p>\n\n\n\n

Financing of Oil and Gas in South Korea Is on the Rise<\/strong><\/h3>\n\n\n\n

While South Korea declared to stop financing coal<\/a>, its interests in fossil fuels – particularly oil and gas – remain strong. Globally, it is the fourth largest financer<\/a> of fossil fuels behind China, Canada and Japan, respectively. In fact, compared to coal between 2011 – 2020, South Korea’s public finance for oil and gas was 13 times larger. <\/p>\n\n\n\n

During the last decade, the Export-Import Bank of Korea (KEXIM), Korea Trade Insurance Corporation (K-SURE) and Korea Development Bank (KDB) provided USD 127 billion<\/a> in overseas oil and gas projects. In addition to this, according to Solutions to Our Climate’s analysis<\/a>, other South Korean companies providing financing towards fossil fuel projects include GS E&C, Daewoo E&C, SK Ecoplant, Hyundai E&C and Samsung C&T.<\/p>\n\n\n\n

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South Korea’s Annual Support for the Oil and Gas Industry, Source: Solutions to Our Climate<\/a><\/em><\/figcaption><\/figure><\/div>\n\n\n\n

The Dependence on Oil and Gas in the Green Energy Age Carries Risks on All Fronts<\/strong><\/h2>\n\n\n\n
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South Korea’s is targeting a greenhouse gas emissions reduction by at least 40%<\/a> by 2030 from its 2017 levels. Currently, it is sitting at a 19% reduction mark<\/a> that would need to scale up to 59% by 2030 to be in line with the Paris Agreement. This may be unreachable if South Korea decides to substitute coal for gas. If following this pathway, the country puts at risk more than being misaligned with the Paris Agreement.<\/p>\n<\/div>\n\n\n\n

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