President Moon Declares '2050 Carbon Neutrality'... Urgent Challenge for Business Community

"Reduce Coal-Fired Power Generation Share Below 5%"
Industry Faces 'Double Burden' of COVID-19 and Greenhouse Gas Regulations
EU Implements Carbon Neutrality Policies Step-by-Step Through Legislation

[Asia Economy Reporter Kim Bo-kyung] President Moon Jae-in's declaration of 'carbon neutrality by 2050' is expected to accelerate the push for coal phase-out and low-carbon policies. According to the government's scenario, the share of coal-fired power generation will sharply decline to below 5% by 2050. Internal combustion engine vehicles such as gasoline and diesel cars will decrease to about 7 out of 100 vehicles. The industrial sector is concerned that the government will strengthen pressure through environmental regulations to reduce greenhouse gases.

On the 28th, during the budget speech at the National Assembly, President Moon stated, "We will actively respond to climate change together with the international community and aim for carbon neutrality by 2050." Carbon neutrality means that the amount of greenhouse gases removed from the atmosphere offsets the amount emitted, resulting in net zero emissions. President Moon announced plans to expand renewable energy, promote electric and hydrogen vehicles, and create low-carbon and green industrial complexes to achieve carbon neutrality.

Given the characteristics of the Korean economy, which has a high proportion of manufacturing, achieving carbon neutrality by 2050 is an ambitious goal.

In this regard, the '2050 Low Carbon Society Vision Forum' established by the Ministry of Environment submitted greenhouse gas reduction plans to the government in February. It proposed five scenarios to reduce emissions by up to 75% (Plan 1) to 40% (Plan 5) compared to South Korea's 2017 greenhouse gas emissions (709.1 million tons). Plan 1 aims to reduce total emissions to 178.9 million tons by 2050. The forum also presented a future society assuming that reduction efforts proceed according to these scenarios. According to this, the share of coal-fired power generation falls to within 5%, and hydrogen is used as the main energy source. Eco-friendly vehicles such as electric and hydrogen cars exceed 20 million units, accounting for 93% of all vehicles.

[Image source=Yonhap News]

Environmental groups and the United Nations welcomed President Moon's carbon neutrality declaration, but the business community expressed concerns. Large corporations did not hide their worries about environmental regulations and costs. The small and medium-sized enterprises sector was 'bewildered' due to the lack of a concrete concept of carbon neutrality. If greenhouse gas reduction policies are implemented amid the worsening business conditions caused by the COVID-19 pandemic, companies may suffer a 'double burden.'

A representative from the Korea Employers Federation said, "A detailed explanation such as a low-carbon policy roadmap is necessary," adding, "It is questionable whether carbon neutrality can be realized without an implementation plan from the industrial sector." An industry insider said, "The government's push for low-carbon policies is becoming an even greater burden as companies are already bearing costs due to the greenhouse gas emissions trading system." He lamented, "We are currently utilizing 100% of the applicable greenhouse gas reduction technologies. I don't know how we are supposed to reduce more from here."

Meanwhile, in European Union (EU) countries, preparations for coal phase-out and carbon neutrality over the next 20 to 30 years have been carried out calmly and systematically. Germany has been promoting industrial restructuring for coal phase-out since the 1970s. Last year, it announced a plan to phase out coal-fired power generation by 2038. Under the 'Coal Region Economic Strengthening Act,' a total of approximately 40 billion euros in support funds is expected to be invested in major coal mining regions in Germany. Most countries, including the United Kingdom, France, and Sweden, have also enacted new laws aimed at zero carbon emissions.

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