Top office presses ahead with 2035 emissions reduction as industries fear costs, cut in competitiveness

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Top office presses ahead with 2035 emissions reduction as industries fear costs, cut in competitiveness

Published: 10 Nov. 2025, 19:01 Updated: 10 Nov. 2025, 19:40

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

Climate Minister Kim Sung-hwan speaks during a press briefing about the Presidential Commission on Carbon Neutrality and Green Growth's vote for the plans for the 2035 greenhouse gas reduction target between 53 percent and 61 percent compared to 2018 levels in the government complex in central Seoul on Nov. 10. [YONHAP]

Korea is pressing ahead with plans to set its 2035 greenhouse gas reduction target at a range of 53 percent and 61 percent compared to 2018 levels — a lower end five percentage points higher than what industry groups had initially proposed — despite the business sector’s continuous outcry about fears of heightened costs and an expanded threat posed by China’s low-price offensive.

The Presidential Commission on Carbon Neutrality and Green Growth on Monday voted for the target, a day after the government and the Democratic Party reached a consensus on the rate. Only confirmation from the Cabinet on Tuesday is required for its unveiling at the 30th United Nations Climate Change Conference of the Parties, or COP30, in Brazil and its submission as a final draft to the UN Framework Convention on Climate Change next month.

Under UN rules, all countries that are party to the Paris Agreement are required to update their emissions reduction targets, known as Nationally Determined Contributions, or NDC, every five years.

The government has based its target on Korea’s 2018 net emissions of 742.3 million tons, aiming to reduce that figure to between 348.9 million tons for a 53 percent cut and 289.5 million tons for a 61 percent cut by 2035. Unlike the previous announcement, which set a single reduction rate, the new framework establishes both lower and upper bounds.

The power sector has set a maximum reduction target of 75.3 percent compared with 2018 levels, focusing on cutting coal-based emissions and expanding the share of renewable energy. To achieve this, renewable capacity, including solar, is planned to reach 100 gigawatts by 2030.

The industrial sector has been assigned a target of 24.3 to 31 percent. The construction sector aims for a maximum 56.2 percent reduction through the expansion of zero-energy buildings and green retrofitting of aging structures. The transportation sector seeks to cut up to 62.8 percent by expanding zero-emissions vehicles and improving internal combustion engine efficiency.

“We are aware of the difficulties the industrial sector is facing, but setting the target as a range for the first time reflects our effort to reach a social consensus,” said Climate Minister Kim Sung-hwan during a press briefing in the government complex in central Seoul on Monday. “Of around 12 experts in the deliberation, none of the private-sector commissioners opposed it.”

People from the public and private sectors oppose the government's 2035 greenhouse gas reduction targets of 53 to 61 percent compared to 2018 levels during a public hearing held in Yeouido, western Seoul, on Nov. 6. [YONHAP]

Meanwhile, the commission also approved the national emissions allowance plan for the fourth phase, covering 2026 to 2030. The proportion of buyable allowances in the power sector will be gradually raised to 50 percent by 2030, while industries vulnerable to carbon leakage such as steel and petrochemicals will continue to receive free allocations.

Despite these assurances, manufacturers in sectors directly affected by the target such as automobiles, semiconductors and steel remain deeply concerned that the substantial costs could ultimately result in job losses and weakened industrial competitiveness.

Fourteen industry groups representing the business sector, including the Korea Chamber of Commerce and Industry and the Federation of Korean Industries, issued a joint statement after the commission's announcement, arguing that the target will “place a significant burden on industry, particularly given the urgent need to respond to changes in the global economic environment, such as U.S. trade policies, and the fact that reduction technologies in the industrial sector have yet to be fully commercialized.”

“Given industry concerns over increased electricity demand and potential rate hikes stemming from expanded energy transition efforts in the AI era, the government should restrain expected electricity price increases as much as possible and provide advance notice of any adjustments to allow companies to prepare adequately.”

Automakers and auto parts makers, in particular, are uneasy with the target as it could effectively amount to a ban on the sale of internal combustion engine vehicles. Korea plans to expand the number of zero-emissions vehicles to between 8.4 million and 9.8 million by 2035, raising their share to 35 percent of all vehicles on the road.

As of last year, a total of 722,000 zero-emissions vehicles were registered in Korea, and of them, 684,000 were electric cars, while 38,000 were hydrogen-powered. Mathematically, this means that from this year through 2035, annual sales of environmentally friendly vehicles would need to reach roughly 800,000 units, a fivefold surge compared to last year’s sales of 145,000.

Roughly 45.2 percent, or 4,615 out of 10,000 domestic parts suppliers, produce components for internal combustion engines as of now, according to the Korea Automobile Manufacturers Association. Employees at these companies account for 47.2 percent of the industry's total employment, or about 115,000 workers.

“We haven’t set a specific date to end sales of internal combustion vehicles, but by 2030 or 2035, the global market will likely have shifted accordingly,” Minister Kim said.

“While Korea struggles with sluggish sales of EVs, Chinese-made EVs have rapidly gained ground, already capturing roughly 40 to 50 percent of the global market.”

BY SARAH CHEA [[email protected]]