Finance ministry unveils 1,000 trillion won K-GX green transition plan

The finance ministry said Wednesday that South Korea will commit 1,000 trillion won ($744 billion) over the decade to 2035 to a state-led green transition, pairing carbon neutrality with industrial growth in a program it calls K-GX. The plan sets out 200 trillion won ($149 billion) of government spending alongside more than 790 trillion won ($588 billion) in climate finance to be raised through five policy lenders. Private companies are to add 220 trillion won ($164 billion) in investment across 10 flagship projects.

"We must break with the habit of following others and become the designers and leaders of the green market, drawing the map ourselves," President Lee Jae-myung said at the national briefing on the strategy, held at the Korea Chamber of Commerce and Industry in central Seoul. He said the transition has to be a practical solution that builds industrial and national competitiveness rather than a choice between the environment and growth.

The Ministry of Economy and Finance and the Ministry of Climate, Energy and Environment presented the strategy jointly, with Hanwha Q Cells, Posco Holdings, LG Electronics and Samsung Electronics presenting flagship corporate projects at the event.

At the centre of the industrial plan is the decarbonisation of five high-emitting sectors — steel, petrochemicals, cement, semiconductors, displays and refining. Steel producers will move from a 300,000-ton hydrogen-based steelmaking demonstration to what the government aims to be the world's first commercial production by 2030. Cement makers will turn to multi-component blended cement, while semiconductor and display manufacturers will develop processes that replace key process gases with low-global-warming-potential alternatives.

The government aims for 100 gigawatts of renewable capacity by 2030, identifying sites for solar and wind generation, and will replace existing transmission lines with high-capacity cables to add grid capacity over the same period. By 2035, more than 70 percent of newly sold vehicles are to be electric or hydrogen-powered.

Ten green industries are to be cultivated as core sectors: electric vehicles, batteries, solar power, wind power, small modular reactors, power equipment, power semiconductors, heat pumps, hydrogen and carbon capture, utilisation and storage. The plan calls for the world's first commercialisation and mass production of next-generation solar cells in 2028, designation of key solar materials as economic security items, and packages of up to 10 billion won ($7.44 million) for climate technology companies.

Regional measures will be built around five regional hubs and three special zones, including a Naju energy-specialised city and a Jeju carbon-neutral model that would switch all new vehicles on the island to electric by 2035. The government will pursue designation of a "just transition special zone" this year and will draw up a 2040 roadmap for retiring coal-fired plants along with supporting legislation.

The ten flagship projects span four areas: self-reliance in clean energy supply chains, decarbonisation of the country's main industries, electrification of all transport and a green transition of the housing stock, with companies leading work including perovskite tandem solar cell technology and a decarbonised steel ecosystem.

Support will come through tax and regulatory measures. The government plans a domestic production tax credit for core parts and equipment used in solar, wind and battery manufacturing, will move to designate small modular reactors as a national strategic technology, and will amend the Framework Act on Resource Circulation to create a regulatory exception zone. It also plans to lay out the institutional foundations and details for green bonds by the first half of 2027.