Government Launches All-Out Energy Response Amid Prolonged Middle East Risks... Odd-Even License Plate System Resumes, LNG Use to Be Reduced

Odd-Even System Mandatory in Public Sector;
Private Sector May Be Included if Resource Crisis Alert Raised to 'Caution'
Nuclear Plants to Restart, Flexible Coal Operations to Reduce LNG Power Generation
Naphtha Export Restrictions Also Plan

Minister of Climate Kim Sunghwan attends and speaks at the Economic Ministers' Meeting cum Industrial Competitiveness Enhancement Ministers' Meeting held at the Government Seoul Office in Jongno-gu, Seoul on February 25, 2026. Photo by Jo Yongjun

Amid growing uncertainty over energy supply and demand due to the prolonged situation in the Middle East, the government is implementing stringent energy-saving measures, including the mandatory odd-even car restriction system for passenger vehicles in the public sector. In an effort to reduce liquefied natural gas (LNG) consumption, the government will also timely restart nuclear power plants and operate coal-fired power plants more flexibly.

Odd-Even Car Restriction for Public Sector... Mandatory Participation for Private Sector if Resource Crisis Alert Raised to 'Caution'

Kim Sunghwan, Minister of Climate, Energy and Environment, reported this energy-saving response plan during the Cabinet meeting held on March 24. Previously, on March 5, the government issued a 'concern' alert regarding resource security for crude oil and natural gas, and further raised the oil-related alert to 'caution' from 3 p.m. on March 18.

First, the government will strengthen energy-saving measures in the transportation and daily life sectors. The public sector is required to implement the odd-even car restriction system for passenger vehicles, with electric and hydrogen vehicles excluded. The private sector will initially be encouraged to participate voluntarily. However, if concerns about oil supply disruptions intensify and the alert is raised to 'caution,' the government will consider making participation mandatory. Temporary adjustments to commuting hours will also be encouraged for public institutions and large corporations to help disperse transportation demand.

The odd-even car restriction system is a policy that restricts vehicle operation on certain days based on the last digit of the license plate. While it is already in effect mainly for government offices, some places have stopped enforcing it. If expanded to the private sector, it will be the first such action in 35 years since the ten-day rotation system during the Gulf War in 1991. A government official explained, "While we are indeed facing an energy crisis, the greater threat is to people's livelihoods. Mandating the restriction for private vehicles could provoke criticism from those who rely on their vehicles for work or daily living, so we have decided to defer this for now."

Prior to this, local governments and public institutions had effectively resumed the odd-even car restriction system. Although the system was made mandatory for public institutions since 2006, it had become largely ineffective due to significant variations across regions and organizations. This time, the system has been strengthened again under a government directive. The Seoul Metropolitan Government plans to extend the rush hour intervals for subway and bus operations by one hour each, and to implement the odd-even car restriction system at 1,546 public and government-owned parking facilities.

The ruling Democratic Party of Korea is also independently conducting an internal energy-saving campaign. The party's Middle East Situation Economic Response Task Force has proposed implementing the odd-even car restriction for lawmakers and is promoting a campaign to encourage the installation of household solar panels among party members. The party emphasized, "The government and the ruling party recognize the Middle East crisis as a grave threat to national economic security," and stated, "We will mobilize all available policy tools to respond proactively and systematically in order to ensure energy supply stability and minimize industrial damage."

Reuters Yonhap News

Reducing LNG Share in Power Generation

The government plans to adjust the power generation mix to minimize LNG consumption. On days with low fine dust levels, operational restrictions on coal-fired power plants under the seasonal management system will be relaxed. Five nuclear power plants currently under maintenance will be restarted by May to reduce gas usage. In the mid- to long-term, the government will also accelerate efforts to reduce dependence on imported energy by expanding renewable energy and energy storage systems (ESS). This year, the government aims to rapidly deploy over 7 GW of renewable energy and install 1.3 GW of ESS, fundamentally reducing imports of LNG and other energy sources.

This reflects the government’s commitment to energy transition. Korea is a country with a high share of LNG in electricity generation—about 30% of domestic power production as of early this year relies on LNG. If international gas prices rise, this directly leads to higher power generation costs and increased financial burden for Korea Electric Power Corporation (KEPCO). Especially under the current de facto electricity price controls, a rise in LNG prices is likely to translate directly into deficits for KEPCO. Moreover, while crude oil can be stockpiled for over 200 days, LNG has a supply structure where storage, consumption, and import occur simultaneously, making physical stockpiling limited.

The government will also request the top 50 companies with the highest petroleum consumption to establish energy-saving plans and will offer incentives such as priority support for energy-saving facility financing to companies that achieve their targets. For the public, the government has proposed 12 actionable measures, including participation in the odd-even car restriction, using public transportation, maintaining appropriate indoor temperatures, and charging electric vehicles and mobile phones during daytime hours.

Some assessments suggest that these measures are essentially a 'holding strategy.' If the rise in global energy prices persists over the long term, such measures are bound to face limitations. An energy industry official commented, "We are currently in a phase of managing the crisis, but ultimately this issue will shift to how costs are distributed. It is a complex problem linked to rates, the energy mix, and industrial competitiveness."

Meanwhile, the government plans to implement export restrictions on naphtha this week in response to domestic shortages. On March 24, Yang Giuk, Director-General for Industrial Resource Security at the Ministry of Trade, Industry and Energy, stated during the daily briefing of the 'Middle East Situation Response Headquarters' at the Government Sejong Complex, "We are preparing measures to adjust the supply and demand of naphtha in anticipation of a prolonged Middle East situation," and added, "This week, we will proceed with administrative procedures for related measures, including export restrictions, reporting of production and import volumes, and prohibiting hoarding and cornering."

The Ministry of Trade, Industry and Energy believes that these measures will help alleviate concerns over potential shutdowns (temporary work stoppages) at petrochemical companies. Director Yang explained, "Naphtha is mainly exported by refineries, so restricting exports and supplying it to domestic petrochemical companies will help increase their operating rates. At the same time, we are working to include budget support for alternative naphtha imports in the supplementary budget."

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