South Korea's $747 billion K-GX plan links climate finance to emissions cuts

South Korea has set out a $747 billion energy transition and decarbonization strategy through 2035, combining roughly $149 billion in fiscal spending with more than $590 billion in climate finance, ESG News reported. The government expects about $164 billion in separate private-sector investment.

Finance Minister Lee Hyoung-il presented the strategy alongside senior government officials and business leaders. President Lee Jae Myung said the country should use its technological and manufacturing capabilities to compete for leadership in the emerging green economy. "We must move away from the practice of chasing others and become architects and leaders of the green market ourselves," the president said.

The government is targeting 100 GW of renewable energy capacity by 2030 and support for solar, wind, hydrogen, batteries, green steel and small modular reactors. It plans to commercialize tandem solar cells by 2028, and electric and hydrogen-powered vehicles are expected to account for more than 70% of new vehicle sales by 2035, a target ESG News describes as requiring a significant shift across the country's automotive industry and supporting infrastructure.

K-GX targets five of South Korea's highest-emitting industrial sectors: steel, petrochemicals, refining, cement, and semiconductors and displays. The government plans sector-specific decarbonization roadmaps to support its 2035 emissions targets. Steel is a particular focus: the government wants South Korea to become the first country to mass-produce hydrogen-reduced steel and use that capability to compete in the global green steel market.

Projects receiving climate-finance support will be assessed according to their greenhouse gas reduction impact, ESG News reported. The strategy also covers 10 green industries that Seoul sees as potential engines of growth, including electric vehicles, power semiconductors and carbon capture technologies, and it aims to strengthen domestic supply chains for critical clean-energy technologies.