K-Taxonomy Embracing Nuclear Power... Boosting Yoon's 'Carbon Neutrality'

Taxonomy Essential for 'Nuclear Power Return'... EU Already Classifies Green Industries
Nuclear Carbon Emissions One-Fourth of Solar... Inevitable Role in Carbon Neutrality
K-Taxonomy Inclusion of Nuclear Revitalizes Ecosystem... KHNP Export Competitiveness ↑
Western Major Countries Also Expanding Nuclear... US Calls Nuclear "Clean Energy"

[Asia Economy Sejong=Reporter Lee Junhyung] The Presidential Transition Committee decided to revise the Korean-style green taxonomy (K-Taxonomy) because it judged that the taxonomy is an essential condition for the 'nuclear power plant U-turn.' The European Union (EU) already classified nuclear power as a green industry in the EU taxonomy draft announced last year. This is to support the nuclear power expansion trend that major European countries such as the United Kingdom and France are actively pursuing. Experts also believe that renewable energy alone cannot fill the gap left by reduced fossil fuels such as coal to achieve carbon neutrality.

There have been continuous opinions that the K-Taxonomy announced last year was obsessed with the anti-nuclear power policy. It has been pointed out that the government did not properly review the greenhouse gas reduction effects of nuclear power when establishing the K-Taxonomy. According to the Intergovernmental Panel on Climate Change (IPCC), the carbon emissions of nuclear power are 12g per 1kWh, which is only a quarter of solar power generation (48g) included in the K-Taxonomy. The United Nations Economic Commission for Europe (UNECE) also released a report at the end of last year analyzing that among 22 power generation methods, nuclear power has the third smallest environmental impact.

In this process, the Ministry of Environment, the competent authority, was also criticized for 'hasty establishment.' This was because opinions from the nuclear power industry and academia were omitted during the preparation of the K-Taxonomy guidelines. The Ministry of Trade, Industry and Energy's opinion, which insisted on a thorough review of whether to include nuclear power, was not reflected. A nuclear industry official said, "I only heard about the K-Taxonomy after it was created," adding, "As far as I know, there were no nuclear power experts involved in the K-Taxonomy establishment process."

President-elect Yoon Seok-yeol presiding over the transition committee secretariat meeting
(Seoul=Yonhap News) President-elect Yoon Seok-yeol is presiding over the transition committee secretariat meeting at the Presidential Transition Committee office in Tongui-dong, Jongno-gu, Seoul, on the morning of the 22nd. 2022.3.22 [Photo by National Assembly Press Photographers]
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Acceleration of the 'Nuclear Power U-turn'

If the Transition Committee finalizes the inclusion of nuclear power in the K-Taxonomy, the domestic nuclear power ecosystem is expected to gain momentum. First, it will be easier to inject green funds into the nuclear power industry, which requires large-scale investment. Domestic and international financial institutions such as BlackRock and the National Pension Service consider ESG (Environmental, Social, and Governance) as a major investment criterion. If nuclear power companies seek loans or investments to expand their business, they can gain a more advantageous position than non-taxonomy companies. In particular, BlackRock is the second-largest shareholder of Shinhan Financial Group and KB Financial Group, so it has considerable influence in the domestic market.

The carbon neutrality scenario envisioned by President-elect Yoon Seok-yeol is also strengthened. During his candidacy, Yoon emphasized that nuclear power must be used as a baseload power source to achieve carbon neutrality. If green investment accelerates the development of the nuclear power industry, the goal of raising the share of nuclear power generation to the mid-30% range by 2030 can be achieved more efficiently.

The first to benefit from the addition of nuclear power to the K-Taxonomy is Korea Hydro & Nuclear Power. Since the government officially declared nuclear power as an eco-friendly energy source, the nuclear power business, which had been shrinking due to the anti-nuclear policy, can be actively expanded. A representative example is the Shin Hanul Units 3 and 4 project, which was indefinitely suspended in 2017 despite an investment of about 790 billion KRW. Professor Jeong Dong-wook of the Department of Energy Systems Engineering at Chung-Ang University explained, "Considering the global trend, including nuclear power in the K-Taxonomy is a natural step," adding, "The K-Taxonomy is necessary to resume the construction of Shin Hanul Units 3 and 4 or to secure financial support for the nuclear power industry."

Fundraising for overseas nuclear power plant construction will gain momentum, enhancing export competitiveness. Korea Hydro & Nuclear Power is about to sign a second construction contract next month for the El Dabaa nuclear power plant in Egypt, worth 30 billion USD (about 36.7 trillion KRW). It also recently participated in the main bidding for the Dukovany nuclear power project in the Czech Republic, worth 6 billion euros (about 8 trillion KRW). Another nuclear industry official explained, "If nuclear power is not included in the K-Taxonomy, export companies face the dilemma of having to promote energy that is not eco-friendly," adding, "If a country does not classify nuclear power as green energy domestically but receives green financial support abroad, it could lead to unfair trade."

Companies representing the domestic nuclear power industry, such as Doosan Heavy Industries & Construction, will also directly benefit. If Korea Hydro & Nuclear Power wins the contract for the Egyptian nuclear power project, Hyundai Engineering & Construction and Doosan Heavy Industries & Construction plan to take charge of construction. Earlier, securities firms predicted that Doosan Heavy Industries & Construction's operating profit would increase by hundreds of billions of KRW annually due to President-elect Yoon's policy to abandon the anti-nuclear stance.

Overseas Also Pursuing Nuclear Power Expansion

Major Western countries such as the United States and the EU have placed emphasis on nuclear power in their energy supply plans. The United States specified nuclear power as zero-emission electricity in the executive order to achieve carbon neutrality by 2050 last year and extended the design life of two nuclear reactors from 60 to 80 years, adding 20 years. France, once considered a representative anti-nuclear country, changed its policy direction with President Emmanuel Macron personally emphasizing the need to expand nuclear power. Belgium agreed last year to shut down all seven nuclear reactors by 2025 but has recently begun reviewing extending the design life of nuclear reactors due to increased supply chain risks.

China is also actively expanding nuclear power. China plans to invest up to 440 billion USD (about 537.8 trillion KRW) by 2036 to build 150 additional nuclear reactors. This number exceeds the total nuclear reactors built worldwide over the past 35 years.

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