Subsidized deforestation:
Overview of biomass powerin South Korea

DateSpeaker

June 28, Friday 15:30 JST

Hansae Song, Forests & Land Use LeadCONTENTS
1

Why stopping bigbiomassmatters?

4

Consequences offorest & energy policy
incentivizing biomass

2State of biomass
power in South Korea

5

Industry trend:
From state-owned
co-firing to private
dedicated

3

Governanceframework of forest
biomass policy

6

Mitigating forest
biomassin South Korea

7

Next steps forsafeguarding
our forests andclimate

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1.
Why stopping big biomass matters?

Protecting and restoring nature has climate change
mitigation potential comparable to wind and solar

Source: IPCC, 2022

The world is off track to end forest loss, which is driven
by agricultural and forestry commodity production

Source:Forest Declaration
Assessment, 2023;
WRI, 2024

Wood for biomass drives the demand for‘imported deforestation’ in S. Korea
Million metric ton

S. Korea imports of wood from top exporters in 2023
4

Source:Korea Customs Service32

1-

Photo:
Conservation North, 2021

Vietnam

New Zealand

Biomass

RoundwoodThailand
Sawnwood

RussiaBoard & Plywood

Indonesia

Other countries

Other countries

Biomass is a dangerous distraction fromachieving global climate and nature goals
Biomass is a false solution
to climate change

Biomass capitalizes on theclimate and ecological crises
Abusing the carbon accounting
loopholes does not makebiomass ‘green’

Biomass fails to provide
economic benefits

Continuing to burn biomass at the current rate will only deplete the world’s dwindling carbon budget

Most wood is sourced from the natural and biodiverse forests of Southeast Asia, Canada, and Russia
Claiming mitigation benefits from biomass by shifting the climate and humanitarian consequences
to the rest of the world is an act of climate injustice

Biomass is a stranded industry without a clear path to cost-effectiveness or technological breakthroughs

2.
State of biomass power in South Korea

Renewable energy uptake isvery slow in S. Korea•8.1%  share of renewable power forelectricity production•••

All bioenergy is 1.9%

Solid biomass is 1.5%

Bottlenecks for solar and wind uptake•

Power market and grid structures isfossil fuel-centered•••

Monopoly by state-owned KEPCO
Regulatory barriers

Community acceptanceSolar and wind are driving
the global energy transition
Renewable electricity by source in S. Korea
Solar surpassed bioenergy

Solar surpassed bioenergy

Electricity generated (TWh)403020100'12'13
Solar PV

'14'15'16
Wind

Source: Korea Energy Agency, 2019–2023

'17

'18

'19

Bioenergy'20'21
Other'22

In S. Korea, burning wood is more popularthan wind to generate power•••

Biomass  63.7% of all bioenergy

Forest feedstocks  75.3% of all biomass

Biomass in S. Korea  mostly for utility-scale
electricity-only generation

Biomass power, unlike genuine renewables,
emits CO2 throughout supply chains
UPSTREAM
Forestry Sector

Import & Domestic

DOWNSTREAM
Power Sector

Co-firing & DedicatedUpstream imported biomass: Heavy reliance on
overseas forests

Vietnam (48.0%)
Russia (20.2%)
Indonesia (10.6%)
Canada (7.8%)
Malaysia (6.2%)

Upstream domestic forestry industry:
Biomass causes feedstock competition

Biomass increased by 2.5x
Pulp & board decreased by 29%

Downstream power industry: State-owned co-firingand private dedicated power plants
CO-FIRING
Utility
Capacity (MW) Co-firing rate (%)
Korea Midland Power
4,000
1.2~5(SOU)
3,000
2.5~5
Korea South-East Power
3,3405(SOU)
3,2405328.65
Korea Southern Power
10225(SOU)
3,0003~8Korea East-West Power
40010(SOU)
2,0004OCI SE
30370
SGC Energy
25085
GS Pocheon Green Energy
169.9
10Kumho Petrochemical
145
25Hanhwa Energy
9930

DEDICATED
Utility
Korea South-East Power (SOU)
GS EPS
SGC Energy
CGN Daesan
LX International
Seokmun Energy
Jeonju Onepower
Korea East-West Power (SOU)
Seohae CHP
Jeonju Paper
M-Hanam
SG Energy
SUN&L
Eagon Energy
Sunwood
SD Energy
Enprotech
Janggun CHP

Capacity (MW)
325
205
100
60
100
43.2
38.9
32.4
30
24.9
15
9.9
9.8
8.2
8.1
7.9
6.4
55

State-ownedPrivate

3.
Governance frameworkof forest biomass policy

Photo: Newstapa, 2023

Biomass in S. Korea is managed
by three government agencies

MOTIE

Renewable Portfolio Standard (RPS)
Renewable Energy Credits (RECs)
Indirect subsidies for biomass

KFSME

Wood pellet & chip production

Managing greenhouse gas emissions

Driver policy for biomass expansion

Non-accounting of biomass emissions

MOTIE makes biomass profitable by letting
power plants sell RECs•

Power utilities >500 MW are required

to meet renewable mandate (13.5% in2024, 25% by 2030) through either
1) self-procurement or2) REC purchases•Renewable producers earn RECs, withweightings contingent on renewablesource and facility•

REC weightings determine theprofitability of renewable energy

MOTIE grants biomass REC weightingshigher than solar or onshore wind

KFS imposes legality requirements
for imported biomass
Imported forest biomass fuels
Logging
Supervising agency
Relevant regulation
Required document

Pelletizing

Importing

Producer country government

Korea Forest Service,
Korea Customs Service

Producer country forestry law

Timber Use Act,
Regulation to Promote
Legal Timber Trade

Producer country logging/business permit

Quality standard,
Timber legality
document

KFS spearheads the growth of domestic biomass

4.
Consequences of energy & forest policy
incentivizing forest biomass

Photo: The Chosun Daily, 2021

Since 2015, S. Korean biomass power has received 3.7 bn
USD worth of RECs for emitting 70 MtCO2

Lack of sustainability requirements for imported
biomass fuels forest loss around the world

Photo:Mongabay,
2023
Photo:
MekongEye,
2023

Photo:
Renewable Matter,2022

KFS’ unscrupulous definition of ‘forest residues’leads to excessive logging in S. Korea

Conflicting views: KFS seeks to further expand
biomass while MOTIE shows skeptism>50% forbiomass

Bioenergy capped at 13 TWh5.
Industry trend:
From state-owned co-firing
to private dedicatedNo subsidies for new co-firing using imported biomass;
more subsidies for burning ‘forest residues’

Private co-firing remains constant•

Increased subsidies for
new & existing domestic residues (all types)•Constant subsidies forexisting private utilities(co-firing, dedicated, regular)•Decreased subsidies forSOU co-firing (regular)
new dedicated utilities (regular)
Bio-SRFs (all types)•No subsidies for
new co-firing (SOUs, privates, regular)Shifts in biomass industry are triggered bychanges in REC weightings over time
Residues dedicated: 2.0•

Increased subsidies for
new & existing domestic residues (all types)•

Constant subsidies forexisting private utilities

Residues co-firing: 1.5
Regular dedicated: 1.5

Private dedicated: 1.5

Regular co-firing: 1.0

Private co-firing: 1.0(co-firing, dedicated, regular)

SOU co-firing: 0.5

New regular dedicated: 0.5
Bio-SRF dedicated: 0.25

Bio-SRF co-firing: 0New co-firing: 0•

Decreased subsidies for
SOU co-firing (regular)
new dedicated utilities (regular)
Bio-SRFs (all types)•No subsidies for
new co-firing (SOUs, privates, regular)

Drivers for decrease in co-firing:
Increased public awarenessHigh-carbon biomass grew 2x under Moon admin,
resulting in $ 1 bn subsidies•Issue-raising on

illegitimacy of co-firing

KEPCO subsidiaries to double down and build three additional plants•

Advocacy for fairerrenewable market policy•Exposing biomass-led
forest loss

Photo: KBS, 2021

Photo: The Chosun Daily, 2021

Drivers for decrease in co-firing:Consensus among policymakers
Photo: Electimes, 2019

“REC weightings for biomass co-firing to be further reduced”

MP Lee Sung-man “scrape or reduce RECs for all biomass co-firing”

Biomass boom intensifies disruption of RE market
Solid biomass facility is in rapid growthProfitability from ‘uneven playing field’ is the cause
Clear policy direction for biomass is needed•“Co-firing takes away

subsidies for renewables”•“Utilities easily turn toco-firing instead of‘Overcompensated’ biomass
REC weightings to be reduced
Government watchdog ordered MOTIE to readjust REC weightings.
Utilities expected to respond to changed RPS system.
Photo: Energy Daily, 2020

Photo: DNews, 2017

investing in renewables”•“RECs for co-firing are
too high compared toother renewables”

Drivers for decrease in co-firing:
Policy shift to dedicated burning
Photo: Agrinet, 2021

Photo: National Institute of Forest Science, 2022

“Government should increase REC weightings for forest residues”•domestic forestryBiomass co-firing utilities to double down on domestic feedstocks

SGC Energy, HanhwaEnergy, OCI SE to sunset RECs for imported wood pellets
Expected to replace $1.5 bn worth of imports and promote domestic biomass industry

KFS speaks for theindustry•

Strong advocacy fortransitioning fromco-firing imported

biomass to dedicatedburning of domestic
forest residues
Photo: Electimes, 2021

6.
Mitigating forest biomass
in South Korea

Multi-faceted advocacy to builda climate & forests movement
ResearchExposing deforestation,

carbon emissions, accountability,

Press releases, photo actions, media

Media

interview, and investigative journalism

Campaigns

Local communities fighting power plants

Advocacy
Litigation

LITIGATIONand renewable market implications

MEDIA

ADVOCACY

Government, parliament,and interest groups

Constitutional and Administrative Courts

RESEARCH

CAMPAIGNS

Litigation highlight 1:
Strip biomass of its renewable license
Photo: FORESIGHT Climate & Energy, 2020

Type

Constitutional complaints (2020 & 2021)
1.

Target2.
3.

Inclusion of woody biomass as renewable energy inRenewable Energy ordinance
Excessive REC weightings for biomass in RPS ordinance
Exemption of accounting combustion emissions ofbiomass in emission trading system (ETS) ordinancePlaintiff

1.
2.
3.
4.

Residents of planned biomass plant site in S. Korea
Residents of biomass sourcing site in Canada
Solar power cooperatives
General citizens

Rationale

1.
2.
3.

Violation of rights to environment and life
Violation of rights to property
Violation of rights to equality

RulingDismissed• Standing of both plaintiff and target clause revokedLitigation highlight 2:
Remove renewable subsidies for biomass
Type

Administrative lawsuit (2020; active)

Target

REC weightings for biomass in RPS ordinancePlaintiff

Solar power cooperatives

DefendantMOTIE
1.

Rationale

Ruling2.
3.
4.

Climate and environmental impacts of biomass makes it
unfit for REC-eligible renewable energy
Violation of principle of administrative rule of law
Violation of rights to equality
Violation of principle of proportionality

1st trial: Dismissed in Apr 2023
• Standing of both plaintiff and target clause unrecognized• Climate and environmental harms of biomass
unsubstantiated
2nd trial in progress• MOTIE was requested with rationale behind supporting

biomass and opinions on its environmental impact• Court closely examined the arguments from bothsides through 5 hearings, indicating the issue haspermeated the courtrooms for the first time

• Standing remains an issue, but opened the door for

further contention in the court of appeals

Litigation highlight 3:
Cancellation of biomass power plants
Type

Administrative lawsuit (2021)

TargetProposed 200MW dedicated biomass power plant by Gunsan
Bioenergy, set up by state-owned Korea Midland Power(KOMIPO) and Hana Financial group in 2015

PlaintiffGunsan Bioenergy

Defendant

City of Gunsan•

Ruling ofSupremeCourt••••City of Gunsan rejection of the project met by the company’slawsuit in 2019
City won the first and lost the second trial
Gunsan Bioenergy won Supreme court trial in Oct 2021
Years of delay forced the company to cancel the projectCity of Gunsan, KOMIPO and Doosan signed a MOU to in2022 to build a hydrogen plant instead

Ally lawsuit in Hawaii (2023)

Photo: Honolulu Civil Beat, 2023

7.
Next steps for safeguarding
our forests and climate

2024 is a big year for biomass since MOTIE ispoised to make revision to REC weightings
PolicyOpportunities

Triennial revision of REC weightings

Elimination of REC weightings for biomass• MOTIE sees biomass as ‘bridge fuel’ with a limited role to play in long term energy scenarios• MOTIE is aware of heightened controversies around biomass and frustration from non-biomass timber industry

Continuation of current weightings

Risks• MOTIE’s tendency to protect existing corporate profits and overlook environmental consequences of biomass• Opaque revision process with minimal opportunity to intervene and lack of public awareness

Other implications• Likely to be the final revision of REC weightings before RPS transitions to auction-based renewable markets• Post-2024 biomass campaigns will require more private sector and market-oriented strategies

KFS’ consideration of biomass sustainability criteria
can come with both positives and negatives
PolicyOpportunities
Risks

Other implications

Introduction of sustainability criteria

Reduction of high-risk roundwood and imported feedstocks

Distraction from phasing out biomass entirely and getting caught in technicalities

KFS- and Industry-led criteria are likely to be ineffective and greenwashing as like in Europe and North America
KFS’ proposed criteria of consideration for sustainability criteria

1. Prepare cascading principles of wood use in consideration ofindustry reality
2. Link with forest resource use policy in public development lands
3. Pilot project and research on lifecycle analysis-based carbon
accounting

4.

Research on improving landholder profit and localized energy use

5.

Reduce RECs for imported wood pellets and improve certification levels

6.

Develop guidelines on sustainable biomass harvest

7.

Research positive impacts and those to forest environment resulting
from biomass harvest

Where biomass policy is headed in S. Korea:
Private, domestic, and dedicatedVery unlikely• New co-firing

Likely• Continued co-firing by private utilities

Unlikely•

No RECs available for new co-firing of regular biomass•••

Large-scale coal-to-biomass conversion

Decreased RECs for dedicated burning of regular biomass•

Decreased RECs for existing SOU co-firing•

Return of SOU co-firing

Small-scale and localized use of biomass

Lack of government support and incentives

RECs for existing private facilities remain the same
Increase in imported biomass for existing facilities

No meaningful restrictions on imported feedstocks

More Biomass-to-heat use in industrial complex

Very likely

More private burning of domestic forest residues

High RECs & policy focus of KFS and industry
Highly incentivized yet feedstock availability is aquestion for large-scale deployment

Where biomass stands in 2024:
A global perspective
Photo: UN Biodiversity, 2022

Photo: UN Climate Change, 2023

Biomass is only part of the East Asian demand
for last remaining rainforests
FOREST DEGREDATIONPOWERBiomass

DEFORESTATION
FOOD

Forest-risk
agriculture
TRANSPORT.

Timber

BiofuelsNeed for strengthened cross-boundary
cooperation to fill in the action gap
LITIGATIONREGIONAL
COORDINATIONINTERNATIONAL
ATTENTIONGRASSROOTSCONNECTION

MEDIA

ADVOCACYPRIVATE & FINANCE
ENGAGEMENTRESEARCH

CAMPAIGNSThank you

Inquiry

hansae.song@forourclimate.org