South Korea Unveils $747 Billion Energy Transition and Decarbonization Plan

South Korea has unveiled a 1,000 trillion won ($747 billion) energy transition and decarbonization strategy through 2035, combining 200 trillion won in fiscal spending with more than 790 trillion won in climate finance. The K-GX, or Korea-Green Transformation, plan targets 100 GW of renewable energy capacity by 2030, faster decarbonization across five of the country’s highest-emitting industries and electric and hydrogen vehicles accounting for more than 70% of new vehicle sales by 2035. The government is also targeting growth in green steel, batteries, solar, wind, hydrogen, small modular reactors and carbon capture technologies.

 

Climate Finance Is Being Used to Reduce Private-Sector Risk

 

A central part of K-GX is the use of public spending and climate finance to make long-term low-carbon investment easier for businesses. Finance Minister Lee Hyoung-il said the programme includes 200 trillion won in fiscal expenditure and more than 790 trillion won in climate finance, alongside a separate 220 trillion won private-sector investment plan.

The government plans to assess projects receiving climate-finance support based on their greenhouse gas reduction impact. That links access to capital more directly with measurable decarbonization outcomes, while public funding is intended to absorb some of the technology and market risks that have held back private investment in newer clean-energy industries.

 

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Heavy Industry Is at the Centre of the Decarbonization Strategy

 

South Korea is targeting steel, petrochemicals, refining, cement, and semiconductors and displays, five sectors responsible for a significant share of the country’s industrial emissions. Sector-specific roadmaps will be developed to support progress towards South Korea’s 2035 emissions targets.

Steel is one of the most ambitious areas. The government wants South Korea to become the first country to mass-produce hydrogen-reduced steel, using hydrogen to replace more carbon-intensive production processes. Carbon capture technologies, advanced batteries and power semiconductors are also among the 10 green industries K-GX aims to support.

 

Renewables and Clean Transport Get Defined Targets

 

The strategy calls for South Korea to reach 100 GW of renewable energy capacity by 2030, alongside support for solar, wind and hydrogen. The government also plans to commercialize tandem solar cells by 2028 and strengthen domestic supply chains for important clean-energy technologies.

Transport is another major part of the plan. Electric and hydrogen-powered vehicles are targeted to account for more than 70% of new vehicle sales by 2035, tying industrial policy to emissions reduction as South Korea looks to maintain its position in automotive manufacturing while moving towards lower-carbon technologies.

 

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Energy Security and Industrial Competitiveness Are Being Linked

 

The government is presenting K-GX not only as a climate strategy but also as an economic and energy-security programme. Officials said tightening global carbon rules, rising climate risks and concerns around energy security are increasing the need for South Korea to build domestic capabilities across renewable power and low-carbon technologies.

President Lee Jae Myung said South Korea should move from following other countries to becoming a leader in the emerging green economy. That framing puts industrial competitiveness alongside emissions reduction, with the government looking to use the transition to create new domestic industries rather than treating decarbonization mainly as a compliance cost.

 

Delivery Will Depend on Turning Finance Into Industrial Capacity

 

The scale of K-GX makes implementation the key test. South Korea now has targets covering renewable power, clean vehicles, industrial decarbonization and new technologies, but meeting them will require large amounts of capital to move from financial commitments into factories, infrastructure and commercially viable projects.

SK Group Chairman Chey Tae-won said government risk-sharing could help address private-sector hesitation around long-term carbon-neutral investments. By 2030 and 2035, progress on the 100 GW renewable target, hydrogen-reduced steel and clean vehicle sales will provide clearer evidence of whether the $747 billion strategy is producing the industrial transformation the government is targeting.