South Korea’s bold move to wind down coal is a turning point in Asia’s energy transition

In a world inching closer to climate tipping points, South Korea has just made a seismic shift in its energy policy that could ripple across Asia and beyond. In June 2025, the newly elected President Lee Jae-myung announced a landmark decision: a complete phase-out of coal-fired power plants by 2040—ten years ahead of the previous target. This bold move not only redefines South Korea’s energy future but also positions the country as a potential climate leader in the region.

From Coal to Clean: A policy pivot

Coal has long been the backbone of South Korea’s energy mix, accounting for over 32 per cent of electricity generation. But the new administration is rewriting the script. In a decisive step, the government cancelled the Clean Hydrogen Portfolio Standard (CHPS 2025) tender for ammonia co-firing in coal plants—once seen as a transitional decarbonisation strategy. The rationale? Ammonia co-firing, while reducing carbon emissions, still prolongs the life of coal infrastructure and emits nitrogen oxides and particulate matter. As Minister Kim Sung-hwan aptly put it, “It is right to discontinue coal-ammonia co-firing.”

Instead, the government is pivoting toward hydrogen co-firing in natural gas plants, a cleaner albeit more complex alternative. This transition is not without its challenges—South Korea will rely heavily on hydrogen imports, and the infrastructure for hydrogen production, storage, and transport remains nascent. Yet, the commitment is clear: the future is fossil-free.

Institutional Overhaul: The birth of MCEE

To steer this transformation, South Korea has established the Ministry of Climate, Energy and Environment (MCEE)—a first-of-its-kind integration of climate, energy, and environmental governance. By absorbing energy policy responsibilities from the Ministry of Trade, Industry and Energy, MCEE is now the central command for South Korea’s decarbonisation agenda. This structural shift signals a more holistic and aggressive approach to climate action, aligning policy, regulation, and implementation under one roof.

Global Context: A growing coalition against coal

South Korea’s announcement comes at a time when the global momentum to phase out coal is accelerating. According to the Global Energy Monitor, countries like the UK, Portugal, Austria, Belgium, Peru, and Sweden have already eliminated coal power since the Paris Agreement. Finland recently shut down its last coal plant four years ahead of schedule, proving that with the right mix of planning, regulation, and incentives, early coal exits are achievable.

Yet, the world still has a long way to go. Only 12 per cent of global coal capacity is aligned with Paris Agreement targets. To stay within the 1.5°C limit, the world’s richest nations must retire all coal plants by 2030, and the rest by 2040. South Korea’s 2040 target, while ambitious, is a critical step in the right direction.

COP30: The world watches

As the world gears up for COP30 in Belém, Brazil, South Korea’s policy shift couldn’t be timelier. The summit, marking a decade since the Paris Agreement, will focus on turning pledges into action. Key agenda items include:

• Climate Finance: Operationalising the $300 billion annual pledge made at COP29.

• Fossil Fuel Phase-Down: Strengthening global commitments to exit coal and oil.

• Renewable Energy Expansion: Tripling global renewable capacity by 2030.

• Nature Protection: Launching the “Tropical Forests Forever Facility” to preserve ecosystems like the Amazon.

South Korea’s strategy to wind down coal offers a blueprint for other industrialised nations grappling with similar energy dilemmas. It also opens the door for green hydrogen diplomacy, especially with countries like India, Australia, and Saudi Arabia emerging as potential hydrogen exporters.

A Call to Action: From policy to advocacy

As I highlighted in my earlier article, Need for De-COAL-onisation, the path to a sustainable future demands more than just policy—it requires persistent advocacy, cross-border collaboration, and public engagement. With the CHPS-II cancellation and the formation of MCEE, South Korea has laid the groundwork. Now is the time for industry leaders, regulators, and civil society to rally behind this vision.

South Korea’s de-coal-onisation is more than a national policy—it’s a statement of intent. As the world converges at COP30, the message is clear: the era of coal is ending. The question now is not whether we can transition to clean energy, but how fast and how fairly we can do it.

Pratha Jhawar is Lead - APAC Business Development & Partnerships at ReNew

Views expressed are personal and do not necessarily reflect those of the organisation or Down To Earth