South Korea can move faster toward carbon neutrality by investing more in renewables and fixing key parts of its power market, the International Energy Agency (IEA) announced in a new report. The country has grown its economy while keeping emissions mostly flat since 2018, but it still gets over a quarter of its electricity from coal—a major hurdle to reaching its 2050 net zero goal.
Korea was one of the first IEA members to pass a legally binding carbon neutrality law in 2021, with a 2030 emissions cut as a stepping stone. But breaking the link between emissions and economic growth is tough. Power demand keeps climbing as more buildings, cars, and factories switch to electricity, and sectors like semiconductors and data centers are using more energy too.
The IEA says Korea needs big investments in clean power, better grids, and smarter markets. Reforming the wholesale electricity market could bring in more money and give investors clearer price signals. Renewables have grown over the past five years, but Korea still has the lowest share among IEA members. Limited land, forests, and public pushback against new infrastructure are slowing things down. Fixing that will take better planning and more effort to bring the public on board.
Energy storage will be vital as wind and solar expand. Korea has started building a market for storage services, but more needs to be done to attract investment and plug storage into the grid. The country also launched a hydrogen roadmap back in 2019, focusing on transport, buildings, and power. The IEA says Korea should spell out how low-carbon hydrogen fits into tough sectors like heavy industry and freight, and set clear rules for building and running hydrogen infrastructure.
Korea’s Emissions Trading System covers about 80% of national emissions, but low prices and thin trading activity limit its punch. The report suggests auctioning more permits, letting more players in, and adding a price stabilizer to better support climate targets. It also highlights progress on institutional reforms, like creating the Ministry of Climate, Energy and Environment to pull policies together. Setting up an independent regulator for power, gas, and hydrogen would help with transparency and pricing, the IEA said.
Korea’s industrial strengths—heavy industry, chips, batteries, electronics, nuclear tech—put it in a strong global position. By linking its energy shift to that expertise, the country can grow sustainably, boost exports, and help other nations cut emissions, the report said.
