Invest 1,000 trillion won over the next 10 years to drive K-GX... Accelerate decarbonization

[Financial News] The government will invest a total of 1,000 trillion won in funding, including 200 trillion won in fiscal spending and more than 790 trillion won in climate financing, to pursue a Korean-style Green Great Transformation (K-GX) over the next 10 years.
The government held a public briefing on its K-GX strategy, which includes these measures, on the 7th in the International Conference Room of the Korea Chamber of Commerce and Industry.
To accelerate the decarbonization of the entire industrial structure, the government plans to shift five major greenhouse-gas-emitting sectors—steel, petrochemicals, cement, semiconductors and displays, and refining—to decarbonized processes, while expanding production of eco-friendly, high-value-added products and speeding up the green transition.
The steel industry plans to launch a 300,000-ton-scale demonstration project for hydrogen-based ironmaking by 2030 and has set a goal of becoming the first in the world to mass-produce steel using this process. To that end, the government also plans to develop measures to ensure a stable supply of affordable electricity, contingent on corporate investment.
The petrochemical and refining industries plan to expand production of eco-friendly, high-value-added products through the development of electric naphtha cracking facility (NCC) technology. The cement industry will develop multicomponent blended cement, while the semiconductor and display industries plan to develop technologies to replace key process gases with alternatives that have a low global warming potential (GWP).
To reach 100 GW of renewable energy by 2030, the government plans to comprehensively identify sites for solar and wind power generation and draw up detailed measures to lower the cost of renewable power. It also plans to replace existing power lines with higher-capacity ones by 2030 to secure additional transmission capacity, and to foster industries such as direct-current power transmission and distribution.
In the transportation sector, the government aims to secure an early foothold in the next-generation mobility market by increasing the share of electric and hydrogen vehicles among new vehicles to at least 70% by 2035. To that end, it plans to establish a subsidy system for eco-friendly fuels and promote adoption by reforming electric vehicle subsidies.
The government also plans to foster 10 flagship green industries. The 10 fields are electric vehicles, batteries, solar power, wind power, next-generation small modular reactors (SMRs), power equipment, power semiconductors, heat pumps, hydrogen, and carbon capture, utilization and storage (CCUS). A total of 220 trillion won will be invested in private-sector K-GX signature projects linked to these industries.
Climate-tech startups will also receive focused support. The government plans to help them grow into unicorn companies through in-depth support for innovative research and development (R&D) projects at each stage of growth, expanded demonstration test beds, and package support worth up to 10 billion won for promising climate-tech companies.
To ensure that regions and the public alike benefit from GX, the government will identify flagship regional GX models and foster regional GX hubs. For Naju’s energy-specialized city, it plans to develop measures to build an ecosystem—from technology development to investment and startup creation—centered on Korea Electric Power Corporation and the Korea Institute of Energy Technology (KENTECH). Under a Jeju Province-style carbon-neutrality model, it plans to convert all new vehicles in the province to electric vehicles by 2035 and demonstrate leading decarbonization projects, including distribution grids and virtual power plants (VPPs).
The government plans to invest a total of 1,000 trillion won in funding for a sustainable K-GX. In particular, it will substantially expand the Climate Response Fund and allocate at least 50% of the 790 trillion won in policy financing to regional areas and at least 70% to small and mid-sized companies. For tax support, it plans to introduce a domestic production tax credit and pursue the designation of SMRs as a national strategic technology.
To provide full support for K-GX, the government plans to establish a legal basis and create a public-private K-GX consultative body headed by the Deputy Prime Minister for Economic Affairs, thereby building a pan-government support system.

[email protected] Seo Young-jun Reporter