Challenges of Decarbonization Polices and Technological Innovation

toward Carbon Neutral Society in Korea

2021. 9.24

Jeongin Kim*, Daehan An**(*Professor, Chung-Ang University, **Doctoral student, Kyoto University)0-목차1. Background of Carbon Neutrality
2. Responses of Countries and Companies for
the Carbon Neutrality in the World
3. Current Situation and Outlook for the
Carbon Neutrality in South Korea

4. Future Direction for for the Net Zero in South Korea

11 Background of Carbon Neutrality
•
•
•
•
•

UN IPCC (2021): 「Climate Change 2021: The Physical Science Basis 」
WWF (2020): The projected loss of GDP over the next 30 years due tothe climate crisis is more than $83 billion (USA), $80 billion (Japan)
and $10 billion (Korea).
What level should GHGs be reduced to maintain 1.5 degrees?
- Net Zero Carbon by 2050
Carbon neutrality: Achieving net-zero carbon dioxide emissions.
Book “Six Degrees” say ;- Increase of 1℃: Extinction of polar bear
- 2℃: Melting Greenland, Surging death for heatstroke- 3℃: Disappearing Amazon, 4℃: Flooding New York city
- 5℃: Burning all jungle, intensifying flood and drought- 6℃: Extinction 95% of creature (6 degrees)
Energy transition,
Industry restructuring,
Change of transport andbuilding- Innovative transformation in energy source- Innovative industry restructuring- Accelerate 4th industrial revolution

Drastic technical innovation,
Securing finance- Expansion of investment for SOC to respond toclimate change, and increase technology R&D- Increasing financial roles ; public and private

Civic education, co-operation- Encouraging citizen participation and- Strengthening community-based cooperation

22. Response of Countries and Companies for Carbon Neutrality•(EU) After the announcement of the European Green Deal (2019),- Legalize 2030 reduction target to achieve carbon neutrality- Approved the “European Climate Law” (55% reductions below 1990 levels by 2030),- Announce Fit for 55 with CBAM(Carbon Border Adjustment Mechanism) as a means of

implementation- ‘Fit for 55’ means the legislative package of 13 bills
•

(USA)

•

Invest $2 trillion for clean energy and low-carbon infrastructure,•

Reinforcement of automobile carbon emission regulations.
(Targets) Achieve 100% clean energy economy and net zero GHG emissions before ‘50(Power generation) Carbon pollution free by 2035
(Building) Reducing carbon footprint by 50% by 2035
(Transport) Building 500,000 EV charging stations by 2030

3

“Fit for 55” legislative package (EU)- Reduce emissions at least 55 percent by 2030 compared to 1990 levels.
- Comprised of thirteen proposals: Eight are revisions to existing laws, five are new proposals.
[Fit for 55 – new proposals]
Forest Strategy ; to improve quality, quantity and resilience of EU forests,- ensure sustainable use of biomass, and plant three billion trees by 2030.
Carbon Border Adjustment Mechanism(CBAM) ; to place a carbon price on
imports and prevent EU companies being undercut by energy-intensive competitors;
Social Climate Fund ; to help citizens finance investment in energy efficiency, clean
mobility and renewable energy;
ReFue lEU Aviation Initiative ; to oblige fuel suppliers to blend more sustainableaviation fuels in jet fuel, including e-fuels;
Fuel EU Maritime Initiative ; to stimulate uptake of sustainable maritime fuels andzero-emission technologies.
Source: European Commission (2021)

43. Current Situation and Outlook for Carbon Neutrality
in Korea• In 2017, total GHG emissions in Korea were 709.1 million tCO2eq of GHGs,
which is 2.4% up from the previous year (727.6 million tCO2eq as of 2018)2018년 기준 부문별 비중

National GHG emissions and removals trend (1990-2017)
Source: South Korea government (2020)5

< Korea’s GHG Emissions Status by Sectors (2015-2020)(unit : million CO2eq.)
Conformed

Estimated

Sectors

’15

’16

’17

’18

’19

’20

Gross
emissions

692.5

693.5

709.7

727.6

699.5

648.6

(0.1%)(2.3%)(2.5%)(-3.9%)(-7.3%)

602.7

615.7

632.4

611.2

563.7

(0.3%)(2.2%)(2.7%)(-3.3%)(-7.8%)

53.2

55.9

57.0

51.0

47.4

(-1.9%)(5.1%)(1.9%)(-10.5%)(-7.1%)

20.8

21.0

21.2

21.0

21.3

(-0.8%)(0.7%)(1.1%)(-0.8%)(1.2%)

16.8

17.2

17.1

16.3

16.3

(1.7%)(2.2%)(-0.7%)(-4.5%)(-0.1%)(year-on-yearrate)

EnergyIndustry

Agriculture

Waste

600.7

54.3

21.0

16.6

•

Korea’s Emission rank: 11th among UNFCCC, 5th among OECD (as of 2018)•

Korea’s Emission proportion: 1.51% of global emission (as of 2018),

source: carbon Neutrlity committee “Scenario Report ”, 2021 8

6

• Korea’s NDC target until 2030 is cut GHG emissions by 24.4% below 2017 level -2017• However, National Congress just pass the law (Carbon Neutral and Green Growth Basic
Law, 2021.9) – More than 35% compared to 2018, even more than 40% recommended) .

Source: South Korea government (2020)<2030 GHG reduction targets>

7

2030 - 2050 Net Zero Target(2019) 702.8

Electric(2030) 536

Industrybuilding
Transport.
wastesource: M OE “ Long term plan for the 2050,” 202.11.9

8• Net-Zero scenarios until 2050 (by Carbon Neutrality Committee, 21.8 )- 1st scenario (25.4 million ton), 2nd (18.7 million ton), 3rd (Net-zero)
2050(unit: million CO2eq)

2nd (97.3%)

3rd (100 %)Sectors

2018

Total

727.6 (686.3)

25.4

18.7

Net-Zero

Energy

269.6

46.2

31.2

0.0

(Renewable Energ.)

10%

56.6%

58.8%

70.8%

Industry

260.5

53.1

53.1

53.1

Transport

98.1

11.2

11.2

2.8

Building

52.1

7.1

7.1

6.2

Agri.

24.7

17.1

15.4

15.4

Waste

17.1

4.4

4.4

4.4

Others

5.6

1.2

1.2

0.7

Sinks

-41.3

-24.1

-24.1

-24.7

CCUS

-

-95.0

-85.0

-57.9

Hydrogen

-

13.6

13.6

0.0

1st(96.3%)

Net-Zero scenario of South Korea
Source: MOE (2020)

9

Methods of Technologies and Energy Mix Proportion in 3 Net Zero Scenarios

Scenarios

1st

2nd

3rd

Emissions(million ton)

Main Methods

25.4

 Coal-fired plant: Maintenance (7 units)
 Nuclear plant: 7.2%
 Electric car and hydrogen car: 76%

18.7

 Coal-fired plant: Shut down
 Nuclear plant: 7.2%
 Electric car and hydrogen car: 76%

Net-Zero Coal-fired and LNG plant: Shut down
 Nuclear plant: 6.1%
 Electric car and hydrogen car: 97%

Source: MOE (2020)10

[Energy Mix Plan in the Net-Zero Scenario (in Detail)]

scenario
Generation

Nuclear

Coal

LNG

PV

Wind
(land)

Wind
(sea)

New
power

Fuel
-cell

Grid

Others

89.9

19.1

101.1

530.7

38.5

141.4

177.2

121.4

33.1

3.9

Total

1,256.4

①

(%)

7.2

1.5

8.0

42.2

3.1

11.3

14.1

9.7

2.6

0.3

Capacity

11.4

7.26

32.9

413.2

14.6

42.6

57.8

17.2

5.6

1.2

603.8
(%)

1.9

1.2

5.4

68.4

2.4

7.1

9.6

2.8

0.9

0.2

Generation

86.9

0

92.2

530.7

38.5

141.5

159.6

121.4

33.1

3.9

(%)

7.2

0

7.6

43.9

3.2

11.7

13.2

10.1

2.7

0.3

Capacity

11.4

0

30.1

413.2

14.6

42.6

52.1

17.2

5.6

1.2

1,207.7
②

593.7
(%)

1.9

0

5.1

69.6

2.5

7.2

8.8

2.9

0.9

0.2

Generation

76.9

0

0

445.8

178.3

267.4

270.0

17.1

0

3.9
1,259.4

③

(%)

6.1

0

0

35.4

14.2

21.2

21.4

1.4

0

0.3

Capacity

11.4

0

0

347.0

67.7

80.5

88.1

4.1

0

1.2
600

(%)
Source: MOE (2021)

1.9

0

0

57.8

11.3

13.4

14.7

0.7

0

0.2
11

• There are three pillars for innovations of Korea to achieve 2050 carbon neutrality: ① Technological ② Social ③ Policy<Technological Innovation for Carbon Neutrality>

Establishing policies fortechnological convergence

Driving R&D for technological integration andconvergence
Establishing R&D foundation for mitigation
technologies
Evaluating mitigation potentials fromtechnology development stage

Technologicalinnovation
Evaluating mitigation potentials

Assessing co-benefits of adaptation for carbonneutral society
Adopting Life Cycle Assessment approach intechnology assessment

Scaling up investment intechnological breakthroughs-

Source: South Korea government (2020)12

Social innovation for carbon neutrality
Raising people’s awareness of climate crisis
Public outreach campaign for climate action
Raising public awareness
Environmental education
Higher education and research
Broader public engagement in policymaking
Governance and decisionmaking
Socialinnovation

Enhancing conflict management mechanism
Laying groundwork for just transition
Greater role of local governments

Role of local governments
Emissions reduction projects at local level
Green finance and climate change
Mobilizing green financeGreen finance strategy

Establishing taxonomy for green financeBetter access to ESG information through TCFD
Better access to ESG information through TCFD
Scaling up green finance infrastructure

Source: South Korea government (2020)13

Policy innovation for carbon neutrality
Assessing NDC
implementation

Importance of implementation assessment
Synthesis report for implementation assessment
Laying institutional framework for climate change
response

Institutional framework

Linking mitigation policies with energy polices
Considering climate change impact in policymaking

Policyinnovation

Building foundation for energy transition
Increase Role of ETS
Carbon pricing
Introduce Carbon Taxation or charges
Leadership by public sector

Public sector’s leading role

Korean Green New Deal

Pushing for Green New Deal as catalyst for carbon
neutrality
Key areas of Green New Deal

Source: South Korea government (2020)14

Top 10 Korea’s Low Carbon Technology Current and Future

Solar and wind

Solar cell efficiency

Wind power capacity(20)

HydrogenSupply price (won/kg)
21

Bio-energy

Generation cost (won/kg)(Contrast with fossil fuel)Generation cost (won/kg)
21
15

Petrochemistry

Steel & Cement
Hydrogen reduction

Price competitiveness of carbon-neutral
products

Limestone replacement in cement
Circulating fuel replacement in cement

Industrial process
Emission reduction technology forsemiconductor & display

Energy efficiency design error in industrial process16Transport

Building

Next generation battery

Building energy efficiency
Comm.

Hydrogen fast charge

tech. improve.

Construction cost of zero-energy
building

Digitization
Power consumption of data center

CCUS
Cost competitiveness of CO2 capture> 20%

System operation
AI based grid connection system

ton

ton

ton

Cost competitiveness of low CO2
products
Stat R & D

17• The Renewable Energy 3020 Plan (RE 3020) envisions producing 20% ofelectricity from renewables by 2030, while the 3rd Basic Energy Plan aims at a30-35% by 2040.

6.6
29
26.4

36.6
Energy mix in South Korea (2020)
Nuclear energy
LNG

Coal-fired

Installed capacity of renewables (MW)
Source: South Korea government (2020)

Renewable energy

Source: South Korea government (2020)18

• Target for Energy Mix in Korea by 2040 ( Renewable Energy)- Increase renewable energy share in total energy generation to between 30% to 35%
through installation of 103 to 129 GW by 2040.

- Share of nuclear energy is filled by renewable energy- 155 to 235 GW of solar and wind could be installed

2017
Nuclear[2040 target for renewable energy]

Source: Taiyangnews (2019)

2040
Renewable + hydro[2040 target for renewable energy mix]

Source: Kmib (2018)19• Fuel cell and Green Hydrogen ; Status and the Future- Considers hydrogen as an important future power source in accelerating industrial
innovation and reducing GHG emissions- Developed a plan to build up a fuel cell facility to generate 8GW of electricity by
2040 and will continue to scale up the production of fuel cells[Fuel cells for power generation]
Source: Roadmap to promote hydrogen-based economy (2019)[Fuel cells for homes and buildings]
20• Green Vehicles ; Status and the Future- Already set an ambitious target of deploying for clean vehicles, ;•EVs and hydrogen vehicles will account for 1/3 of new vehicle sales in 2030.

- Aim to deploy 3 million units of EV and 0.85 million units of hydrogen vehicle by 2030

[2030 target for clean vehicle deployment road map]
Source: South Korea government (2020)21

<Summary of Net-Zero Plan by Sectors in Korea until 2050 (draft) >22

Involvement of Business Sector for Carbon Neutral Status• LG Electronics, LG Chem, Steel companies (POSCO, Hyundai Steel, Dongkuk Steel,
KG Dongbu Steel, Seah Steel, Simpac), Woori Financial Group, NAVER• Joint statement of four companies (Samsung Electronics, SK hynix, Samsung display,

LG display)• LG Electronics: Reducing carbon generated in the production stage by 50% below
2017 levels by 2030. Reinforcing external carbon reduction activities to reduce net

carbon emissions to zero
• LG Chem: Announcement of sustainability strategy based on 2050 carbon neutral
growth. Declaring carbon neutrality for the first time in the Korean chemical industry• The 1st carbon neutrality committee of shipbuilding companies was held
→ Declare 2050 Carbon Neutrality and•Achieve RE100 by 2030

23• The Korea Chamber of Commerce & Industry (2021)- Survey on ‘2050 Carbon Neutrality Response Status and Tasks’ ;Targeting 403 companies participating in the Korean ETS- 57.3% of respondents ; 2050 carbon neutrality as ‘difficult but the way to go’- 42.7% of companies said ; ‘It is difficult to be carbon neutral from practical point• R&D projects required for carbon neutrality- Production technology using renewable energy, 24.8%- Process gas replacement/reduction technology, 22.5%- Energy efficiency improvement technology, 22.2%- Resource circulation technology, 17.5%- CCUS technology, 13.0%• Urgent policy issues (surveyed as %)- Increase R & D investment, 36.7%- Development of innovative technology for decarbonization, 31.0%- Establishment of renewable and hydrogen energy supply infrastructure, 15.1%- Rationalization of the legal system, 11.2%- Build a cooperative network, 5.0%24Strategy of Carbon Neutrality by Key Korean Industry Sectors(Steel)•Change from old furnace methods to hydrogen reduction method and electric arc by 2050 ;- 94% reduction possible (???)•

Enhance energy efficiency and increase electric arc furnace(Petro-Chemical)•

Change fuel mix and law material ; can reduce 31- 55% comparing to 2017•

(EX) CCUS 13.9 million ton , bio- Nafta, maximum Use for Plastic Wastes(Petroleum)•

Change Energy Fuel mix to LNG and Bio-mass, CCUS ; can reduce 53-89 %(Cement)•

Increase Waste, Increase hydrogen Use ;- Can reduce 44% (exclude CCUS), Can reduce 78% (include CCUS)(Electric and Electronics )•Substitute F gas and change products mix

Jung Eun ME, “ Carbon Neutrality and Industry Response , Naional climate change and environmental committee, 2021.3.4

25

Forest and Carbon Neutrality(U.S.A)• Make 2000 ha forestry, improve forest management, urban forestry, and wood product(Canada)• Improve forest management and biomass(EU)• Prevention of forestry related disasters(France)• Must use more than 50% of wood products for New Public building(Japan)• Must use more than 25% of wood products When New Public Building is low than 3rd
floor.
• (Korea)• Sink 27 million CO2 until 2050 and plant 300 million trees• Make more wood house and products

26

4. Future Direction for the Net Zero in South Korea• Make Effective and Void R & D budget; Waste of Budget ??
(Ex) Green building, Green Car, Green technology, Start up- R & D compared to GDP is NO. 1 in OECD and in the World.
- Is it really cost effective and efficient ???
• Make innovate waste treatment policy change ;- Too much regulation, Low valuation of WtE (Waste to Energy)(Petro., Steel , Cement and Chemical Industry can use)
• Make Economic Incentives and Include Strategic Future
Technology Categories (SFTC) such as Low Carbon Tech.
(Ex) IT, Parts, Big Data, AI already included in the SFTC, more tech for low carbon tech.

• Establish “Climate Change Fund” or “Public or Private Green Bank”- Government try to make US $ 2 billion Fund. But Not enough .
- Increase role of Public Finance• Make new Ministry ; Ministry of Climate and Environment• Public and Private R & D Co-op from major industry.
- Battery(ESS), Bio Plastic, Waste, Hydrogen etc

27

Future Policy Direction• Make effective public communication to change civilian mind.
• Enhance capacity of Sink from Forestry and give Incentive- More than 70% of forestry is owned by private.
• Support local government activities and governance• Study on the feasibility of Hydrogen Supply, CCUS, CCS- Still argument is going on.
• Change Education System ;- Mandatory Environmental Education- Lifetime education system for the climate change crisis• Revise and Make Feasible 2050 scenario and make Road Map- Show timeline of 2030, 2040 and 2050
- Increase 2030 NDC Targets from 24.4 % to More than 35% ??
- Still working on the NDC Targets until Oct. 2021 – to be seen28