How Korea Plans to Balance Energy Transition and Industrial Growth in 2026

Translation result.On April 20, President Lee Jae-myung used a one-year review of his administration to press for a pragmatic and balanced approach to decarbonization, instructing ministers to avoid policies that undermine industrial competitiveness or regional economic development.At a combined Cabinet meeting and emergency economic review at the Blue House, Lee told the Ministry of Climate, Energy and Environment to ensure energy and climate policies do not become obstacles to industry or local firms. He repeatedly stressed that ministries must pursue policies that produce tangible improvements in people’s lives and are realistically implementable.Kim Seong-hwan, minister of the Ministry of Climate, Energy and Environment, reported that Seoul had submitted a national target to the United Nations to reduce greenhouse gas emissions by 53–61 percent by 2035. He said the ministry will pursue both new nuclear construction and an expansion of renewable energy as core objectives. Lee responded that while values matter, policymakers must “ensure they do not burden industry or opportunities for balanced development,” and he urged a measured transition because some dependence on fossil fuels may be unavoidable in the short term.Kim emphasized that the central challenge is lowering renewable energy costs rapidly. He noted solar power prices have fallen to roughly 30 KRW per kWh (approximately $0.0225 per kWh) in Saudi Arabia and about 50 KRW per kWh (approximately $0.0375 per kWh) in the United States, and argued that expanding solar while bringing down prices and ensuring local communities share in the gains is critical. Citing gas-fired generation costs of about 140–150 KRW per kWh (approximately $0.105–$0.1125 per kWh), Kim said the government’s task is to make renewables cheaper than gas. He added that the Renewable Portfolio Standard (RPS) bill passed by the National Assembly the previous day will help reduce renewable prices quickly through competitive contracting and auctions.When Kim reiterated the administration’s commitment to decarbonization, Lee quipped that the climate ministry’s work sometimes pits the government’s “left brain” against its “right brain,” asking whether energy and climate priorities might clash with other ministries. After Kim denied such a conflict, Lee pressed the matter again, which observers interpreted as an instruction to favor a practical, phased energy transition over a speed-driven approach.Energy security featured prominently in a discussion held immediately before the ministries’ reports, amid concerns about the Middle East conflict. Industry Minister Kim Jeong-gwan said South Korea had secured about 85 percent of its typical crude oil supplies through July. Lee asked for contingency planning beyond August and urged ministers to prepare for worst-case scenarios, emphasizing the need for both short-term supply stabilization and a mid- to long-term emergency response given the prospect of a protracted war and potential disruptions in the Strait of Hormuz.Responding to Kim Jeong-gwan’s remark that Japanese officials at a recent Korea-Japan industry meeting had envied South Korea’s approach—citing price caps and efforts to diversify away from Middle Eastern oil—Lee praised Kim and encouraged continued vigilance in securing supplies. He suggested dispatching another envoy to negotiate oil supplies and, in a light moment, teased whether the prime minister might travel this time, drawing laughter in the meeting.Deputy Prime Minister and Minister of Science and ICT Bae Gyeong-hoon announced plans to launch a domestically developed, publicly accessible AI platform called “Everyone’s AI” by late this year. Lee asked whether all citizens would be able to use the service with a simple login; Bae replied the government aims for a November–December rollout and intends to provide free AI services to all citizens.The Small and Medium Enterprises and Startups Ministry will deploy AI to detect businesses at risk. It plans to analyze bank delinquency records, policy loan data, Korea Credit Guarantee Fund information, and Financial Services Commission datasets, and then link those inputs with National Tax Service revenue data to build a more sophisticated early-warning system. Minister Han Seong-sook said the scale of the task exceeds human capacity, so AI will be used as the initial detection tool with room for further refinement. Lee endorsed the plan, noting that millions of firms cannot be monitored manually and that AI can help ensure objectivity and fairness.Officials also proposed broader AI integration across government functions, including the Ministry of Strategy and Finance’s budget planning, review, and settlement analyses. Bae said the government is forming a dedicated team with the Ministry of the Interior and Safety to develop a government AI assistant, and Lee urged rapid adoption of AI in areas previously handled by manual processes.