Climate technology promotion in the Republic of Korea

Abstract

The implementation of climate technologies and their commercialization ultimately depends on the success of their research and development (R&D) projects. In the Republic of Korea (ROK), twenty-seven climate technologies were selected to boost the greening of existing industries and to develop new green industries to promote a sustainable climate technology development strategy. Rechargeable battery technology, carbon capture and storage (CCS) technology, smart grids, and sewage treatment are all research areas expected to have tangible outcomes in the forthcoming years. As such, they were included in a comprehensive R&D plan for climate technology advancement, which places an emphasis on climate technology development and commercialization strategy. In this study, the R&D plan of the ROK is reviewed by examining its six core climate technology programs: solar cells, fuel cells, bioenergy, rechargeable battery technology, information technology (IT) applications for the power sector, and CCS technology in detail. The climate policy in the ROK aims to find new economic growth engines and to develop new business opportunities while actively participating in international efforts to combat climate change.

Keywords

R&D plan and strategy ; Climate technology ; The Republic of Korea

1. Introduction

Sustainable development means balancing economic growth and environmental protection while considering social inclusiveness. The needs of the current generation must be met without sacrificing those of the future generation. To mitigate greenhouse gas (GHG) emissions, current strategies involve selecting low-carbon options, increasing renewable energy sources, and promoting the research and development (R&D) of climate technologies. Climate technology refers to technologies that can save energy and resources by actively mitigating GHG emissions and air pollutants. Energy efficiency improvement technology, clean technology, resource recycling, environmentally-friendly technology, and fusion-related technology are various types of climate technologies. The green industry is defined as economic activities that contribute to improving the quality of the environment and energy efficiency. At the 11th Meeting of the National Science and Technology Advisory Council on Climate Change Core Technology Development Strategy, chaired by President Park Geun-hye, the Korean government decided to focus on six key technologies in three areas to combat climate change. According to the United Nations Framework Convention on Climate Change (UNFCCC), the highest global increase GHG emissions between 1990 and 2011 came from Republic of Korea (ROK), due to its high dependence on fossil fuels.

The commercialization of climate technologies will ultimately depend on their R&D success. Hence, twenty-seven climate technologies were selected for improvement because of their potential to “green” existing industries and to develop new green industries. For example, tangible improvements in rechargeable battery technology, carbon capture and storage (CCS) technology, smart grids, and sewage treatment are expected in the forthcoming years. Thus, these technologies were included in a comprehensive R&D plan for climate technology (NSTC, 2009 ), which has an emphasis on climate technology development and commercialization strategy (PCGG, 2009 ).

Section 2 reviews the climate technology R&D plan and strategies of the ROK by examining the six core climate technology programs in detail. In Section 3 , the overall policy direction for the climate technology R&D plans is outlined. In Section 4 , the paper is concluded with a discussion of policy implications.

2. Review of R&D programs on climate technology

The current Korean governments climate policy is to overcome the decline in economic growth by shrinking the middle-class and deepening economic polarization. This will be accomplished through the promotion of creative economic strategies that will integrate the Information & Communication Technology (ICT) into the environmental and energy sectors. An emphasis will be placed on the concept of inclusive green growth: seeking harmonious societal growth through social integration and equity, as well as enhanced environmental protection. In 2014, the second 5-year Green Growth Plan was established, in which the roadmap for the systematic implementation of GHG emission reduction, a domestic-emissions trading system, an energy management system, the expansion of carbon sinks and renewable energy as well as a sustainable energy system are well explained (GTC, 2014 ).

In July 2014, the Korean government chose three key areas, containing six core climate technologies, from which to address the issues of climate change. Three technologies, solar cells, fuel cells, and bioenergy were selected to replace fossil fuel energy production (PACST, 2014 ). In addition, the development of rechargeable battery technology and IT applications for the power sector were promoted for efficient energy production and consumption. Last, CCS technology is to be employed for the direct reduction of GHG emissions.

Each of the six core technology area has a specific target to achieve by 2020. For example, the cost of solar cell module production is expected to be reduced by 35%. Then, the current generation of solar cells is to be replaced with silicon solar cells. In the case of fuel cell, the commercial battery is expected to have an increased efficiency of 120%, as well as a halved manufacturing cost. For bioenergy, the goal is to reduce the production cost of microalgae biodiesel from 3300 KRW L⁻¹ to 1000 KRW L⁻¹ . An additional 3000-ton capacity for bioenergy production, including the construction of demonstration plants, should be implemented by 2017. The target for small and medium rechargeable batteries is to achieve a localization of core materials and the enhancement performance. The application of IT technology in the power generation sector is expected to promote energy management system (EMS) for residential and commercial buildings, as well as factories. The price competitiveness for CCS technologies is expected to decrease from US$150 per ton CO₂ to US$30–50 per ton CO₂ in 2020 (EMM, 2015 ).

The R&D strategy for solar cells technology is to replace the silicon solar cell market, to secure price competitiveness, and to create new markets for the next-generation of solar cells. Investments in the silicon solar cell technology will secure the market competitiveness. The use of silicon semiconductors will reduce the thickness of the wafers, ultimately reducing the production cost by 35%. Increasing the power production efficiency has also been targeted, and will be brought about by manufacturing high-purity silicon. Furthermore, price competitiveness in the market enhanced by reducing the production cost; the cost of raw materials can be reduced through highly efficient production. Non-silicon-based flexible solar cells will replace the existing market and create a new market. The development of next-generation solar cells will be transparent and lightweight and also function as core materials for larger-scale solar cells (GTC, 2014 ).

The R&D strategy for fuel cells is to become the worlds leading fuel cell developer in the transportation fuel cell market. Core materials, such as the electrolytic membrane, the catalyst, and carbon fibers, are to be developed by 2020. By developing production technology for these key components, the cost of production is expected to be reduced by 50%, compared with that for 2013. This production cost reduction will allow for the creation of competitive domestic small and medium enterprises (SME), as well as create jobs in the automotive and shipping industries. Another area for development is high efficiency fuel cell technology, which will be used to reduce thermal power generation. High efficiency batteries created from molten carbonate (MCFC) and solid oxide cells (SOFC), as well as next-generation high-capacity batteries that will improve the efficiency of fuel cell power generation, particularly with respect to thermal power generation via hydrogen mass production and storage capacity, are required (GTC, 2014 ).

The R&D strategy for bioenergy is to develop a stable supply of raw materials to reduce oil consumption. This stable supply will arise from the development of microalgae extraction technology, in particular, the development of a catalyst to increase the mass production conversion rate. The R&D strategy for alternative biofuels has been based on domestic petrochemical technologies, in partnership with the domestic petrochemical industry, and will substitute overseas bio-resources, leading to a world-class bioenergy country (GTC, 2014 ).

The R&D strategy for rechargeable battery development is to create rechargeable batteries for phones that have advanced capabilities and a localization of key components and materials. This in turn will induce innovation and global competitiveness within the area of eco-friendly cars. The clear target for the technological development in this area is to substitute approximately 40% of the imported parts and materials with domestic components. The development and commercialization of a large-capacity rechargeable battery is to back-up the power supply. The new rechargeable battery technology will be used for cell phones, tablet PCs, and eco-friendly cars and will lead to the development of other innovative products and eventual expansion into the global market (GTC, 2014 ).

A new EMS will minimize the waste of energy during both production and consumption by combining information technology (IT) with the power generation systems. For example, by sensing the temperature in a building, unnecessary energy consumption can be prevented by automatically adjusting the light levels. The technological development of an EMS that integrates renewable energy sources will create a domestic distribution model for a hybrid system demonstration project. This project will contribute to the expansion of renewable energy bases as an EMS can be optimized to maximize the use of renewable energy sources. The early development of an EMS and its IT applications will also expand the potential overseas export markets with a first-mover advantage (GTC, 2014 ).

The R&D strategy for CCS technology is to ensure that we are one of the worlds leading sources of CCS technology and to secure global market competitiveness through a CCS export model. To achieve high efficiency for electronics, low-cost CO₂ sorbents, and separators, as well as to establish new materials development and mass production techniques, a demonstration power plant for a CO₂ capture device with 10 MW capacity will be installed. Therefore, the core technology for one ton of CO₂ storage will be developed by 2017. It is also planned to demonstrate 100 tons of CCS with the integration of 300 MW power plants by 2020 (GTC, 2014 ).

The current R&D strategy for six core climate technologies were extracted from the twenty-seven green technologies in five categories in 2009, based on the criteria on the market potential, economic impact on each industry and the global technology competitiveness (Table 1 ).

Table 1. Twenty-seven core green technologies.

Categories	Core green technologies
Forecasting technology	Climate change forecasting and modeling development Technologies to analyze the impact of climate change and to apply the analysis results
Higher efficiency technology	Integrated coal gasification combined cycle (IGGC) High efficiency–low pollution vehicle technology Intelligent transportation/logistics technology Building eco-space and urban recycling technology Environmentally-friendly low energy architectural technology Green process technology considering environmental load and energy Lighting LED and green IT technology Technology to improve electricity IT and efficiency of electronic appliances High efficiency secondary cell technology
Pollution free industrial economy	Virtual technology
Energy source technology	High efficiency low-cost silicon-based solar cell technology Mass production of non-silicon-based solar cell and core originative technology Bioenergy production element technology and system Renovated light water reactor design and construction Environmentally-friendly nuclear nonproliferation fast reactor and nuclear cycling system development Fusion reactor design and construction technology High efficiency hydrogen production and storage technology Next-generation high efficiency fuel cell technology Environmentally-friendly plant growth catalyst technology
Post-treatment technology	Carbon capture/storage/treatment technology Non-CO2 treatment technology Water system quality evaluation and management technology Technology to secure alternative water resources Technology to reduce and recycle wastes and convert them into energy Toxic materials monitoring and environmental cleaning technology

Source: NSTC (2009) .

The ROK R&D investments into the core climate technologies were 1.4 trillion KRW in 2009 and rose to 2.1 trillion KRW in 2012: an increase of 37.5%. Domestic solar power and fuel cell efficiencies have caught up to the worlds highest technological levels, at 85% and 82%, respectively. In some areas, the R&D investment into climate technology has led to some globally-leading technologies. Note that in order to respond to climate change, the Korean government has proactively changed its policy direction. It has secured new economic growth by creating new markets while mitigating GHG emissions through the development of core climate technologies. However, campaigns and policies for energy savings alone were not sufficient to mitigate the increasing GHG emissions. Therefore, the ROK needs to create innovative climate technologies and to develop alternative energy sources that can replace fossil fuel power generation. Hence, R&D investment into climate technology has become the first key element of the ROK climate policy, as well as the development of new and competitive markets related to climate change (GTC, 2014 ).

The Korean government expects to meet its voluntary targets for the mitigation of GHG emissions through the development of core climate technologies. A 15.7% reduction of GHG emissions in the power sector could be achieved by 2020 and 10 million tons of CO₂ emissions from the iron and steel industries could be mitigated. Second, climate technologies such as solar, bioenergy, next-generation raw materials such as secondary batteries will create new markets for raw materials technological development. Technology development for hydrogen cars and CCS will take a leading role in the creation of new global markets, as well as being used to respond to climate change. Thirdly, climate technology development will create added value to the ROK economy, and will combine with the automotive manufacturing and IT industries, which are the main manufacturing sectors in the ROK. Integrated technologies, such as zero-energy buildings, Energy Saving System (ESS), and EMS, are good examples of new industries that will be created. Emerging industries, such as the next-generation of environmentally-friendly vehicles and wearable electronics, will contribute to the Korean economy as the next source of economic growth engines (GTC, 2014 ).

To promote R&D programs on climate technology, the basic policy direction from the National Science and Technology Advisory Council is to improve the framework of our R&D support system and to enhance the governance system. A new innovative institute to coordinate and support leading climate technological developments, the Green Technology Center (GTC), was established in March 2012. Its role is to develop a climate technology roadmap, to assess emerging climate technology, and to support joint technological development. In addition, the selection process for climate technology research projects will consider their potential practical economic impact on job creation and their encouragement of convenient green living. In order to enhance the R&D capacity and minimize the cost for SMEs, the policy direction should lean toward encouraging joint research activities among interdisciplinary researchers (IMM, 2012 ).

3. Policy direction of R&D programs on climate technology

To build a foundation for future economic growth through climate technology implementation, the governance of R&D investments into climate technology needs to be improved. In 2008, R&D investments into climate technology were only 13.3% of the total national R&D investments; however, by 2012, this had increased to 17.1% (GTC, 2014 ). In 2012, to promote the development of a new and renewable energy supply, a renewable portfolio standard (RPS) was introduced. Moreover, private investment into renewable energy was increased from 1.9 trillion KRW in 2008 to 3.5 trillion KRW in 2011 (SERI, 2011  and GTC, 2014 ). However, despite a financial commitment of 108.7 trillion KRW between 2009 and 2013, the installation of solar power, smart grid systems, and other major green industries were insufficient to halt an overall increase in GHG emissions from the ROK. Furthermore, this increasing trend in per capita energy consumption is expected to continue, as there has been no policy coordination between energy demand management, energy prices, and market-based energy industry restructuring.

Since 2008, the ROKs overall R&D investment into climate technology has been based on a national investment plan that addresses the various national strategies, including the green growth national strategy and a 5-year Green Growth Plan. So far, the comprehensive climate technology R&D and commercialization strategy has achieved about 98% of its original target. In 2012, the R&D investment into climate technology increased to 2.7 trillion KRW, which is about 17.1% of the total R&D investment. There has been a consistent increase into climate technology investments, and more than 70% of these investments were directed toward core climate technologies (Table 2 ). The R&D investments into climate technology over a 5-year period (2008–2012) reveal that these investments have expanded significantly, with about an annual growth rate that is two times higher than expected, when compared with the total national R&D investment. However, it can be noted that the R&D investment into core climate technology has changed, year-to-year, depending on the need (GTC, 2014 ).

Table 2. R&D investments from 2009 to 2012.

Year	Total R&D (A)	Climate technology R&D (B)		Core climate technology R&D (C)
	Amount (billion KRW)	Amount (%)	Share (B/A, %)	Amount (billion KRW)	Share (C/B, %)
2009	12,414	1947	15.7	1425	73.2
2010	13,683	2245	16.4	1713	76.3
2011	14,853	2548	17.2	1981	77.7
2012	15,906	2715	17.1	2056	75.7

Source: http://greenplatform.re.kr/frt/greensys/invest_con01.do?menu1=m1&menu2=t0 .

According to the plan for each relevant ministry, the R&D investments into climate technology show a consistently increasing trend. The key ministry for R&D investment, the Ministry of Industry, Trade, and Energy encompasses 46.9% and Ministry of Science, ICT, and Future Planning. The Ministry of Education has received 18.6% of the total R&D investment, including 65.5% of the overall national climate technology investments, 2.7 trillion KRW, in 2012. A steady investment into R&D is needed to achieve the fundamental R&D objectives of the current administration. The Korean government is planning to expand the basic R&D investment into climate technology up to 40% of the total R&D investment by 2017.

4. Conclusions and policy implications

The performance of a climate technology implementation could be measured by the degree of its integration into peoples lives. Long-term climate technological development requires continuous support from both the government and the public sector. The improvement of technical, environmental, and energy-related regulations and policies needs to occur continuously, in order to increase the green national welfare benefits that are connected with high achievements from climate technologies. At present, the second 5-year Green Growth Plan establishes its climate technology strategies based on an understanding of business performance in accordance with a comprehensive evaluation and verification of climate technology (GTC, 2014 ). This results in quantifiable outcomes and commercialization on behalf of the public benefit.

The current climate policy is based on the existing 27 climate technologies and six core climate technology programs. It aims to find new economic growth engines in response to climate change and to major climate trends based on analysis of domestic and international climate technology policies. New business models are proposed through bilateral energy cooperation and joint projects with multilateral agencies, based on the progress and achievement of climate technology developments and commercialization. The Korean government is to commercialize the climate technology both domestically and internationally. Especially, the ambitious R&D programs for the selected areas of climate technologies with specific strategies and target will be implemented during the second 5-year Green Growth Plan. It is worthwhile to note that by 2020 the Korean government will increase the R&D investment on six core climate technology programs more than a half of the total R&D investment in technologies which are responding to climate change. In addition, the new direction of six core climate technology programs is to promote the active participation of private sectors, when the commercialization of six core technology programs to be started and the new market is to be created.

The GTC will play an important role in the facilitation of climate technology initiatives with international technology institutes, including multilateral banks (such as the Asian Development Bank and World Bank), national and international public institutions, and private companies (such as the Climate Change Technology Exchange). The facilitator of climate technology such as GTC should know both sides of technology and international cooperation. In addition, a technology cooperation platform with developing countries that are vulnerable to climate change could be explored to tackle climate change issues. By selecting domestically suitable technologies that are necessary for these countries, this could lead to feasibility studies on specific climate projects and the application of climate technologies, as well as the investigation of possible climate technology-sponsoring financial resources from bilateral and multilateral financial institutes of both public and private sources.

The programs and policies for climate technology development in ROK may give some implication to China, which has more potential of climate technology implementation and commercialization. The selection of climate technology and target area is very important. In case of ROK, 6 core climate technologies are selected. The participation of both national research institutes and private companies are critical. Once technology is matured and ready for the commercialization, both domestic and international markets should be targeted, especially in developing countries, since the application of climate technology seems to be more cost-effective in developing countries in order to mitigate GHG emissions globally.

Acknowledgements

This research was supported by the research grant from Yonsei University .

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