By Troy Stangarone
In October last year, President Moon Jae-in pledged that Korea would become carbon neutral by 2050. The question is how to achieve that goal.
Over his time in office, the Moon administration has taken a series of initiatives to change Korea's energy mix and reduce emissions. These have included efforts to support the development of hydrogen as a fuel source, a commitment to achieve 39 percent power generation from renewables by 2040, and the introduction of the Green New Deal.
But more will need to be done to achieve carbon neutrality by 2050. The transportation sector is one area to target.
According to South Korea's 2050 Carbon Neutral Strategy, the transportation sector was responsible for 14 percent of South Korea's greenhouse gas emissions and 32 percent of petroleum consumption as of 2017.
The 2050 strategy envisions moving toward greener transportation through an increase in low-carbon fuels, the development of eco-friendly vehicles and a combination of better management of transportation demand and green logistics.
Under a recent update to Korea's electric vehicle (EV) strategy the government will also work with industry to bring down the cost of EVs by 10 million won. The aim is to speed up the adoption of EVs.
However, the 2050 Carbon Neutral Strategy and the new plan to reduce EV costs do not call for the phase-out of the sale of new vehicles with internal combustion engines. It's time for Korea to take that step.
In a recent op-ed, Fatih Birol, head of the International Energy Agency (IEA), noted that if the world is to achieve net-zero emissions by mid-century, countries will need short-term goals to reduce emissions.
In the transportation sector he estimates that EVs need to rise to more than 50 percent of new vehicle sales by 2030. In Korea's current 2050 Carbon Neutral Strategy, sales of vehicles with internal combustion engines are expected to still account for 66.7 percent of sales in 2030.
While the new plan to reduce EV costs may help increase the sales of EVs, committing to phasing out the sale of new internal combustion engines would have benefits for Korea.
In addition to putting Korea on pace for the IEA's projected transportation sector emissions reductions to achieve carbon neutrality by 2050, it would also begin to align Korea's policy with other major automotive markets and meet changing international standards.
The United Kingdom will phase out the sale of new petrol and diesel vehicles by 2030, as will Belgium, Demark and Sweden. By 2035, 50 percent of vehicles sold in China will be required to be hybrids, while the remaining 50 percent will need to be powered by electric batteries, hydrogen or some other new type of energy source. Petroleum-powered vehicles will no longer be part of the mix.
If slower, other countries are planning to transition as well. France and Canada have targeted 2040. For the moment, Germany is resisting an EU-wide target, but as more automotive companies pledge to end the production of vehicles with internal combustion engines that will likely change.
The United States, Canada and the United Kingdom are among the top five export markets for automobiles from South Korea. While it is unclear if the Biden administration will follow its European allies and China in banning the sale of new vehicles with internal combustion engines, California, the most important market for automotive emission standards in the United States, will by 2035.
While Hyundai and Kia are putting significant resources into the development and sale of electric and hydrogen-powered vehicles, phasing out the sale of new internal combustion engines could strengthen both companies as they face increasing competition.
General Motors has pledged to sell only EVs by 2035, while Ford has announced that it will only sell EVs in Europe and the United Kingdom by 2030.
Jaguar will also go all electric, and Volkswagen plans on introducing 70 new electric vehicles over the next decade. While Hyundai and Kia will build electric vehicles on a common platform, both have less ambitious electric vehicle plans.
Competition is another factor. In 2020, the EU passed China as the second-largest market for electric vehicles, but Beijing has designs on becoming the dominant manufacturer as the world transitions to electric vehicles. Outside of Tesla, domestic brands dominate the Chinese market for EVs.
The time of the internal combustion engine is coming to an end, but countries are competing to become the dominate players in the future of transportation. Korea is well-placed to be competitive in EVs and hydrogen vehicles, but needs to transition its domestic market to meet the challenge.
Setting a date for the end of new vehicle sales with internal combustion engines is an important step in securing that transition and putting Korea on a path to become carbon neutral by 2050.
Troy Stangarone (ts@keia.org) is senior director and fellow at the Korea Economic Institute of America.
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Over his time in office, the Moon administration has taken a series of initiatives to change Korea's energy mix and reduce emissions. These have included efforts to support the development of hydrogen as a fuel source, a commitment to achieve 39 percent power generation from renewables by 2040, and the introduction of the Green New Deal.
But more will need to be done to achieve carbon neutrality by 2050. The transportation sector is one area to target.
According to South Korea's 2050 Carbon Neutral Strategy, the transportation sector was responsible for 14 percent of South Korea's greenhouse gas emissions and 32 percent of petroleum consumption as of 2017.
The 2050 strategy envisions moving toward greener transportation through an increase in low-carbon fuels, the development of eco-friendly vehicles and a combination of better management of transportation demand and green logistics.
Under a recent update to Korea's electric vehicle (EV) strategy the government will also work with industry to bring down the cost of EVs by 10 million won. The aim is to speed up the adoption of EVs.
However, the 2050 Carbon Neutral Strategy and the new plan to reduce EV costs do not call for the phase-out of the sale of new vehicles with internal combustion engines. It's time for Korea to take that step.
In a recent op-ed, Fatih Birol, head of the International Energy Agency (IEA), noted that if the world is to achieve net-zero emissions by mid-century, countries will need short-term goals to reduce emissions.
In the transportation sector he estimates that EVs need to rise to more than 50 percent of new vehicle sales by 2030. In Korea's current 2050 Carbon Neutral Strategy, sales of vehicles with internal combustion engines are expected to still account for 66.7 percent of sales in 2030.
While the new plan to reduce EV costs may help increase the sales of EVs, committing to phasing out the sale of new internal combustion engines would have benefits for Korea.
In addition to putting Korea on pace for the IEA's projected transportation sector emissions reductions to achieve carbon neutrality by 2050, it would also begin to align Korea's policy with other major automotive markets and meet changing international standards.
The United Kingdom will phase out the sale of new petrol and diesel vehicles by 2030, as will Belgium, Demark and Sweden. By 2035, 50 percent of vehicles sold in China will be required to be hybrids, while the remaining 50 percent will need to be powered by electric batteries, hydrogen or some other new type of energy source. Petroleum-powered vehicles will no longer be part of the mix.
If slower, other countries are planning to transition as well. France and Canada have targeted 2040. For the moment, Germany is resisting an EU-wide target, but as more automotive companies pledge to end the production of vehicles with internal combustion engines that will likely change.
The United States, Canada and the United Kingdom are among the top five export markets for automobiles from South Korea. While it is unclear if the Biden administration will follow its European allies and China in banning the sale of new vehicles with internal combustion engines, California, the most important market for automotive emission standards in the United States, will by 2035.
While Hyundai and Kia are putting significant resources into the development and sale of electric and hydrogen-powered vehicles, phasing out the sale of new internal combustion engines could strengthen both companies as they face increasing competition.
General Motors has pledged to sell only EVs by 2035, while Ford has announced that it will only sell EVs in Europe and the United Kingdom by 2030.
Jaguar will also go all electric, and Volkswagen plans on introducing 70 new electric vehicles over the next decade. While Hyundai and Kia will build electric vehicles on a common platform, both have less ambitious electric vehicle plans.
Competition is another factor. In 2020, the EU passed China as the second-largest market for electric vehicles, but Beijing has designs on becoming the dominant manufacturer as the world transitions to electric vehicles. Outside of Tesla, domestic brands dominate the Chinese market for EVs.
The time of the internal combustion engine is coming to an end, but countries are competing to become the dominate players in the future of transportation. Korea is well-placed to be competitive in EVs and hydrogen vehicles, but needs to transition its domestic market to meet the challenge.
Setting a date for the end of new vehicle sales with internal combustion engines is an important step in securing that transition and putting Korea on a path to become carbon neutral by 2050.
Troy Stangarone (ts@keia.org) is senior director and fellow at the Korea Economic Institute of America.
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