Climate Policy Engagement Analysis
Climate Policy Engagement Overview: Korea Enterprises Federation (KEF) appears to have limited but broadly negative engagement with climate policy. KEF appears to support renewable energy policies in South Korea, while having generally negative engagement with other climate policies, particularly the EU Carbon Border Adjustment Mechanism (EU CBAM) and South Korea’s 2030 Nationally Determined Contribution (NDC) emissions reduction target. KEF has taken both positive and negative positions on energy transition. KEF supports the electrification of transportation and government policies to transition towards low-carbon energy, while emphasizing costs and supply uncertainty in the energy transition.
Top-line Messaging on Climate Policy: KEF had limited top-line messaging on climate policy in 2023-2024. In its 13th ESG Management Committee Paper published in July 2024, KEF opposed the 2050 carbon neutrality target, suggesting it is realistically impossible to achieve. According to KEF’s 2022 Business report published in March 2023, its chairman emphasized that environmental policy should be balanced so it does not burden industries and the national economy, but did not clarify his position any further.
Engagement with Climate-Related Regulations: KEF appears to support renewable energy policies in South Korea, while having generally negative engagement with other climate policies, particularly on the EU Carbon Border Adjustment Mechanism (EU CBAM) and South Korea’s 2030 Nationally Determined Contribution (NDC) emissions reduction target. According to an October 2024 press release, in a proposal on regulatory reform tasks submitted to the Office for Government Policy Coordination, the Ministry of Economy and Finance (MOEF) and other government ministries, KEF suggested a reform of renewable energy regulations in South Korea to incentivize the expansion of renewable energy usage in Korean industries. On the other hand, according to an October 2024 press release, KEF Chairman Sohn Kyung-shik appeared to not support the EU CBAM at a meeting with the EU Ambassador to Korea, emphasizing the burden on Korean companies. In addition, according to its 13th ESG Management Committee Paper published in July 2024, KEF’s ESG Management Committee opposed South Korea’s 2030 NDC at a meeting with the MOEF, suggesting it is “impossible” to achieve and needs “reasonable adjustment.” In an October 2023 op-ed in Hankyung newspaper, the vice-chairman of KEF also did not support South Korea’s 2030 NDC, stating there was no thorough review nor industry opinion gatherings.
Positioning on Energy Transition: KEF has taken both positive and negative positions on energy transition. It appears to support the electrification of transportation and a transition to low-carbon energy including ‘new and renewable energy’, bio-based SAFs and hydrogen, but there is some ambiguity around the alignment of this with IPCC advice on delivering 1.5°C warming. In addition, KEF has emphasized concerns around costs and economic competitiveness in energy transition. According to an October 2024 press release, KEF appeared to support the electrification of transportation, calling for government support for electric vehicle infrastructure in suggestions submitted to the Office for Government Policy Coordination, Ministry of Economy and Finance (MOEF), and other related ministries. In the same press release, KEF communicated broad support for transition to low-carbon energy including ‘new and renewable energy’ and hydrogen, but was unclear whether it supported a transition aligned with IPCC advice on delivering 1.5°C warming. According to a KEF Monthly e-magazine published in November 2023, in a proposal on the 2023 Regular Session submitted to the National Assembly, KEF supported policies incentivizing the production and uptake of bio-based SAFs. However, according to a November 2024 press release, the chairman of KEF appeared to not support the energy transition, emphasizing costs and supply uncertainty.
This summary was last updated in Q4 2024.