The South Korean government has announced a plan to invest a total of 1,000 trillion won over the next decade to achieve carbon neutrality while promoting economic growth through its Korean Green Transition (K-GX) strategy. The initiative aims to reduce carbon emissions in five major high-emission industries—steel, petrochemicals, refining, cement, and semiconductors—while fostering green industries such as electric vehicles, batteries, renewable energy, small modular reactors, and hydrogen as next-generation export sectors.
On October 7, the government unveiled the K-GX strategy in a joint announcement by relevant ministries. This strategy follows President Lee Jae-myung's presentation of the green transition concept as part of the 'three K-initiatives' during his keynote speech at the United Nations in September.
The K-GX strategy aims to boost potential growth rates, energize green exports, and establish South Korea as a leader in green manufacturing. To achieve these goals, the government will pursue three main directions: K-GX as a new growth engine, inclusive K-GX for all, and sustainable K-GX, along with nine policy tasks.
Funding for the initiative will total 1,000 trillion won over the next ten years, combining 200 trillion won from the government budget with over 790 trillion won in climate finance from five major policy finance institutions. The climate response fund will expand from 2.6 trillion won this year to 7.6 trillion won next year, and the government plans to issue green bonds, with specific issuance plans to be established by the first half of 2027 and the first issuance expected in 2028.
Joo Hwan-wook, policy coordinator at the Ministry of Economy and Finance, stated, "The green transition is a survival strategy and a key pillar that will determine our future national competitiveness. We have developed this strategy to transform technological innovation and market creation into new growth engines and opportunities for quality job creation."
A key focus of the strategy is the decarbonization of industrial structures. The government aims to reduce carbon emissions from the five major high-emission industries by 24.3% to 31.0% by 2035 compared to 2018 levels. As of 2024, these industries are expected to emit approximately 250 million tons of carbon, accounting for 38.4% of the country's total emissions.
In the steel sector, the government plans to complete hydrogen reduction steelmaking demonstrations by 2030 and promote commercialization by 2037. A low-carbon steel certification system will be introduced, linked to public procurement, and plans will be made for the establishment of clean hydrogen production facilities and stable low-cost power supply.
In the petrochemical sector, the government aims to develop electric NCC technology by 2028 and transition to electric and non-carbon fuels. The use of bio and recycled raw materials will increase from the current 0.5% to 10% by 2035. The refining sector will expand the production of eco-friendly products such as sustainable aviation fuel (SAF), while the cement industry will raise the proportion of blended cement production from 16% to 40%. The semiconductor and display sectors will work on the commercialization of low-global warming process gas replacement technologies and reduction equipment.
Energy transition is also a major focus. The government aims to achieve a renewable energy capacity of 100 GW by 2030 and reduce the cost of solar energy generation from the current 150 won per kWh to 100 won by 2030 and 80 won by 2035. Starting in January 2027, the renewable energy supply system will be reformed from a focus on the existing REC and spot market to a competitive bidding system.
The government will also strengthen the export competitiveness of green industries. It plans to focus on developing ten key green industries, including electric vehicles, batteries, renewable energy, small modular reactors, hydrogen, and power equipment, with a goal of entering the top three globally in major sectors by 2035. A K-GX signature project led by businesses, worth 220 trillion won, will also be pursued.
The electric vehicle sector aims to achieve a global market share ranking of third by 2035, while the battery sector will promote the commercialization of next-generation technologies such as solid-state and sodium batteries. The solar energy sector aims to become the global leader in next-generation solar cells, and the small modular reactor sector targets a 40% global market share. The power equipment sector will work towards entering the top three globally in next-generation items such as HVDC.
To ensure that regions and citizens can share in the benefits of the green transition, the government will develop regionally specialized GX industries centered around five key areas and three special projects. Investments will support climate risk reduction in aging industrial complexes and vulnerable sectors, while financial and consulting support for transitioning industries and small and medium-sized enterprises will be strengthened.
To enhance public participation, the government will launch a 'Green Card for All' focused on green consumption and transportation, and expand community benefit-sharing models such as solar income villages and wind income villages. By 2030, the government aims to train approximately 50,000 young professionals in the GX sector.
Joo emphasized, "The government will take the lead in paving the way for the GX initiative," announcing plans to support a total of 1,000 trillion won, including 200 trillion won in government funding and over 790 trillion won in climate finance over the next decade. He also noted that tax incentives and regulatory improvements for green industries will be strengthened, and a public-private K-GX council will be established to monitor policy implementation.
The government will also establish a legal framework for advancing the K-GX initiative, including the enactment of laws such as the Special Act on Carbon Neutral Industries, the Act on Promoting Green Transition in Industries, and the Act on Promoting Carbon Neutrality for Small and Medium Enterprises. A public-private K-GX council, chaired by the Deputy Prime Minister, will continue to identify private projects and resolve on-site challenges.
* This article has been translated by AI.
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