Carbon-free Energy
The Korean government and industry have begun to promote the Carbon Free Energy (CFE) system. CFE is a campaign to use 100% energy sources that do not emit greenhouse gases. It is regarded as a way to respond to the RE100 campaign, which requires 100 percent of electricity to be supplied through the use of renewable energy. As many companies feel the burden of securing renewable energy such as solar power, they are pushing for CFE that includes nuclear power.
The Ministry of Trade, Industry and Energy (MOTIE) and the Korea International Chamber of Commerce and Industry (KCCI) organized the CFE Forum as a forum to discuss strategies to expand the use of carbon-free energy and spread it internationally. They held a launch ceremony on May 17. The forum is being attended by major Korean energy spenders such as Samsung Electronics, LG Energy Solutions, SK hynix, and POSCO, private energy companies and a number of experts.
The government and companies plan to review the carbon-free energy certification system that fits our reality in advance and actively participate in the process of forming international standards in the future. The government will prepare a plan to introduce a carbon-free energy certification system within this year and conduct a pilot project next year.
Minister of Trade, Industry and Energy Lee Chang-yang said in his opening address, “RE100 is a meaningful campaign, but it is also a great burden on companies due to situations in Korea. We need to review policies and systems that fit our reality through a comprehensive approach utilizing the concept of carbon-free energy.”
In fact, a study shows that it costs two to three times more to produce renewable energy in Korea than in the United States or the European Union. Solar power cost US$117 per megawatt hour (MWh) in Korea, US$55 in the United Kingdom, and US$44 in the United States in 2022 according to Bloomberg New Energy Finance. Companies that pay high electricity bills will lose their price competitiveness, making the RE100 a de facto trade barrier for Korean companies.
The largest difference between the CFE and RE100 campaigns is whether companies can use electricity generated by nuclear power plants. The question is “With the RE100 campaign becoming a global mainstream movement, are Korean companies the only ones that can follow the CFE framework?” Some experts argue that if the RE100 campaign becomes mainstream, the Korean government’s efforts to restore nuclear power plants may not be as effective as expected.
However, it is difficult to buck the international trend. Major Korean companies such as Samsung Electronics, SK hynix, Hyundai Motor, and LG have already announced their desire to join RE100.
However, it is a positive sign that major countries such as the United States and Japan, as well as global companies such as Google, are recognizing the use of some carbon-free power. In December 2021, President Biden issued an executive order requiring 100 percent of federal government facilities to use carbon-free electricity, but authorizing a 50 percent use of CFE. Japan has a non-fossil certificate system and a mandatory non-fossil power use system in place.