[Gangnam Perspective] War Is Accelerating the Energy Transition

The United States–Iran war, which began in late February, is now entering its second month. As tensions continue to hover between ceasefire and war, industries around the world, including those in South Korea, are facing mounting difficulties across the board, from inflation to exchange rates, after an unexpected shock.
Geopolitical risks from the Middle East, epitomized by the oil shock of the 1970s, have always brought energy crises in their wake. At the time, oil prices surged more than fourfold in a short period, and major advanced economies suffered severe recessions. This time is no different. International oil prices, which had stayed in the $60 range per barrel before the war, climbed to as high as $110 in mid-March, when the conflict was at its peak. Rising tensions in the Middle East are directly disrupting the global crude oil supply chain, fueling volatility in oil prices. That is because fossil fuels such as oil and gas are concentrated in the region.
In particular, the war triggered a supply crunch in naphtha, often called the rice of the chemical industry, dealing a direct blow to manufacturers. Since naphtha, refined from crude oil, is a key raw material for most plastic products, a prolonged shortage would inevitably inflict real damage not only on the petrochemical industry but also on sectors such as healthcare, distribution, and manufacturing.
Yet it is ironic that positive change is emerging amid such confusion and hardship. The rise of green industries is one example. As the war drags on, the renewable energy sector is increasingly being seen as a new growth area that can help break through the crisis.
Until now, the shift toward greener practices has often been pushed to the back burner in corporate strategy, despite its importance, because it requires large amounts of capital in a short time and is widely seen as offering limited practical returns on investment.
But as the United States–Iran war has shown, securing energy security has emerged as a major issue of national competitiveness, and industries are now accelerating their move away from fossil fuels.
In the paper industry, for example, prolonged conflict in the Middle East has heightened concerns over naphtha supply, driving a sharp increase in demand for paper packaging materials. Companies such as Moorim and Hansol Paper are responding by focusing on the stable supply of eco-friendly packaging materials and on market responsiveness, backed by high quality and technical expertise.
Attention is also turning to waste plastic recycling technologies, including pyrolysis oil obtained by heating waste vinyl and plastic at high temperatures. It is reported that if domestic waste plastic is pyrolyzed, it could produce about 75,000 barrels of substitute crude oil per day.
Dosi Ujeon has commercialized a technology that produces high-quality recycled feedstock at naphtha level by catalytically decomposing waste plastic at temperatures below 300 degrees Celsius, without incineration. The company has already completed a plant that can process 6,500 tons of waste plastic and waste vinyl a year and produce up to 4,550 tons of plastic recycled feedstock oil.
The government is also moving quickly. Recently, it unveiled an 'Energy Transition' roadmap centered on reducing dependence on fossil fuels and expanding renewable energy and electrification. The plan is to raise the share of renewable power generation, such as solar and wind, from the current level of about 10 percent to more than 20 percent by 2030.
It is difficult to predict how the United States–Iran war will unfold from here. With so many interests intertwined, uncertainty is likely to persist for some time. But the energy crises that recur every time geopolitical risks emerge in the Middle East should no longer be dismissed as unavoidable.
The crisis triggered by war is, paradoxically, speeding up the energy transition. Major advanced economies around the world are already preparing for the post-fossil-fuel era. We should use the shift toward greener energy to reduce supply chain risks stemming from dependence on specific regions and seize the opportunity to lead new markets.
kim091@fnnews.com Kim Young-kwon, head of SMEs and ventures desk Reporter