[2020 National Audit] Ministry of Industry to Introduce Coal Total Quantity System as Early as 2022 (Comprehensive)

Natural Phase-Out Structure Following Overseas Greenhouse Gas Emissions and Price Increases

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] The Ministry of Trade, Industry and Energy announced plans to introduce a coal total volume system that limits the increase in coal power generation as an additional measure to reduce greenhouse gas emissions, which is expected to cause significant impact. This means accelerating the pace of 'coal phase-out,' a part of the energy transition policy, and is expected to be introduced as early as 2022.

On the 7th, Minister Sung Yun-mo of the Ministry of Trade, Industry and Energy reported this in a work status report at the National Assembly's Industry, Trade, and Small and Medium Enterprises Committee (Sanjoongwi) audit. Minister Sung said, "We will strengthen energy innovation for a low-carbon society."

The Ministry of Trade, Industry and Energy presented the following major policy promotion plans: ▲Realization of an industrial powerhouse ▲Leap to a trade and commerce powerhouse ▲Strengthening energy innovation. The core is to promote the Green New Deal project while expanding the supply of renewable energy and strengthening greenhouse gas reduction measures.

To this end, the ministry announced the introduction of the coal total volume system. Although it has previously announced plans to reduce coal power plants through the draft of the 9th Basic Plan for Electricity Supply and Demand (9th Electric Plan), this is the first time the government has mentioned introducing a policy that controls the total power generation volume of power producers.

It is difficult to find cases of coal total volume system introduction overseas. According to energy experts, countries like Germany, which declared coal phase-out earlier than Korea, do not allow the government to artificially limit the total power generation volume by energy source. Power sources that emit a lot of greenhouse gases are naturally phased out as prices rise in the electricity market.

The government's introduction of the coal total volume system to limit the upper limit of power generation by power producers is explained as a unique phenomenon in Korea. An official involved in the 9th Electric Plan said, "The government's announcement to introduce the coal total volume system can be seen as an acceleration of efforts for 'coal phase-out.' Since coal power plants cannot be forcibly closed in a short period, it appears to be the government's will to manage greenhouse gases by introducing the total volume system."

A power industry official said, "Compared to the allocation method (BM) coefficient of the integrated greenhouse gas emission efficiency standard for coal-liquefied natural gas (LNG) announced by the Ministry of Environment, this seems to be a more reasonable system, but since it limits the upper limit of coal power generation, its impact will be significant."

There is a consensus that the strengthening of 'environmental dispatch' in major policies such as the Ministry of Environment's '3rd National Greenhouse Gas Emission Allowance Allocation Plan (3rd Plan)' and the Ministry of Trade, Industry and Energy's 9th Electric Plan is likely to be linked with the coal total volume system. Environmental dispatch means the principle that economic feasibility as well as environmental factors must be included in the energy source supply plan.

The Ministry of Trade, Industry and Energy plans to strengthen supply chains through activation of solidarity and cooperation in the industrial ecosystem. It will support the commercialization of research and development (R&D) outcomes. Success cases will be discovered mainly in industries such as bio, semiconductors, batteries, and gas turbines.

To accelerate the promotion of the 'Manufacturing Renaissance,' the ministry plans to create a core base for next-generation memory in the Yongin semiconductor cluster, generating about 200 trillion won in added value. It will invest 1 trillion won over 10 years in intelligent artificial intelligence (AI) semiconductors and 1.5 trillion won in future car technology development.

The Ministry of Trade, Industry and Energy will attend the comprehensive audit on the 22nd following the audit on this day. The Sanjoongwi summoned Park Ji-won, chairman of Doosan Heavy Industries, Kim Dong-wook, executive director of Hyundai Motor Company, and Lee Gam-gyu, vice president of LG Electronics, as witnesses for the audit.

This content was produced with the assistance of AI translation services.