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South Korea Affirms Gas as Transition Fuel

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Defying calls for a hasty exit from fossil fuels, South Korea has included natural gas in its green taxonomy. The move reaffirms gas' role in the energy transition in South Korea through the mid-2030s — a huge development considering it is the world’s third-largest LNG market. Compared with the proposed EU taxonomy, the criteria for the use of gas is less stringent — it classifies gas as a green investment until 2030-35, before the expected commercialization of hydrogen. South Korea is looking to use gas to wean off coal, its largest baseload power fuel, as nuclear remains a divisive issue and renewables penetration still modest. Describing LNG as a “necessary transition fuel for the net-zero transition,” South Korea’s taxonomy guidelines support the country’s climate targets, which include phasing out coal and achieving carbon neutrality by 2050, as well as a 40% reduction in greenhouse gas (GHG) emissions from 2018 levels by 2030. South Korea’s revised nationally determined contribution (NDC) target is expected to reduce LNG's share of power generation from 26.8% in 2018 to 19.5% by 2030, and coal's from 41.9% to 21.8%. Renewables are envisaged to jump from 6.2% to 30.2%. The government for the first time introduced a target for ammonia co-fired in coal plants, set at 3.6%.

Topics:
Low-Carbon Policy, Hydrogen, Coal, Nuclear, Gas Supply, LNG Trade, ESG
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