South Korea’s plan to end coal-fired power by 2040 is set to hit major exporters, including Australia and the United States, while reshaping Asia’s energy trade and climate path.
The policy, announced at the COP30 climate summit in Brazil, commits Asia’s fourth-largest economy to retire most of its coal plants within 14 years and cut carbon emissions by at least 50% by 2035. Forty coal plants already have fixed closure dates.
Coal currently supplies about 30% of South Korea’s electricity. The country has the world’s seventh-largest coal power fleet and is the fourth-largest importer of thermal coal, behind China, India, and Japan. Australia and the United States are among its biggest suppliers.
The shift follows the June election of President Lee Jae Myung, who campaigned on stronger climate action than his predecessor. Supporters say renewables are now cheaper, more secure, and better for long-term growth. Critics warn the transition could simply replace coal with gas.
South Korea is a major importer of liquefied natural gas (LNG), which burns cleaner than coal but still produces climate-warming emissions. Talks are ongoing for South Korea to invest $350 billion in U.S. projects and buy up to $100 billion in U.S. energy products, including LNG, according to the Associated Press.
Depending on the final deal, South Korea could import between 3 million and 9 million tons of U.S. LNG annually. This comes as the country aims to cut LNG’s share of its energy mix from nearly 20% last year to 10.6% by 2038.
“If we just replace coal plants with LNG, the coal exit does not lead to a real green transition,” said Insung Lee of Greenpeace in Seoul. “It simply shifts Korea’s addiction from coal to gas.”
The coal phaseout has raised alarms in Australia, the world’s second-largest coal exporter and the largest exporter of metallurgical coal. Australia expects to export $1.5 billion worth of thermal coal to South Korea in 2025, with similar hopes for 2026, according to Kepler.
James Bowen, director at consultancy ReMap Research, said Australian coal exports could lose half their value within five years. “South Korea’s decision should prompt Australia to discuss timelines for its own fossil fuel phaseout,” he said.
South Korea says economics, not just climate pressure, is driving the change. Renewable energy provided only 10.5% of its electricity last year, far below Japan’s level, but offshore wind capacity is set to rise to 4 gigawatts, ten times current output.
Climate Minister Kim Sung-hwan said renewables would lower power costs, reduce import dependence, and boost industrial competitiveness. “This shift strengthens our energy security,” he said.
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