Full Breakdown
South Korea's Coal Phase-Out Signals Shift for Australian Exports
11/18/2025, 12:13:45 PM
South Korea's Commitment to Coal Phase-Out
At the COP30 climate conference in Brazil, South Korea announced its decision to phase out all coal-fired power plants by 2040, joining the "Powering Past Coal Alliance." This coalition includes approximately 60 nations and 120 sub-national governments committed to reducing reliance on coal, a move that poses significant implications for Australia, one of South Korea's primary thermal coal suppliers. South Korea, which has the world's seventh-largest coal power fleet, relies on coal for about 30% of its electricity and is the fourth-largest thermal coal importer globally, accounting for approximately 8% of the market.
Implications for Australian Coal Exports
The announcement is expected to have a profound impact on Australia's thermal coal exports, valued at around A$2.3 billion (US$1.5 billion) annually. Analysts predict that Australia's fossil fuel exports could decline by about 50% over the next five years, regardless of the country's emissions reduction targets. James Bowen, director of ReMap Research, emphasized that continuing to depend on fossil fuel exports is a risky strategy for Australia. He stated, “For Australia to continue to rely on fossil fuel exports in the medium to long term is a risky strategy.”
Criticism of Australia's Current Policies
Despite South Korea's commitment to decarbonization, Australia has faced criticism for its slow transition away from fossil fuels. The Australian government has set a target to increase the share of renewable energy from 42% to 82% by 2030, but the political landscape remains contentious. The opposition Liberal Party recently indicated plans to subsidize coal power if they win the next election in 2028, undermining bipartisan support for net-zero emissions by 2050.
Official Statements & Responses
South Korea's Climate Change and Energy Minister, Kim Sung-hwan, stated that the shift from coal to clean power is essential for both climate action and energy security. He noted, “The shift from coal to clean power is not only essential for the climate. It will also help both the Republic of Korea and all other countries increase our energy security, boost the competitiveness of our businesses, and create thousands of jobs.” Conversely, Tania Constable, CEO of the Minerals Council of Australia, suggested that with appropriate policy measures, Australia could continue to supply coal to South Korea while reducing carbon emissions.
What's Next for Australia?
As South Korea embarks on its coal phase-out, Australia faces a critical juncture in its energy policy. Experts argue that the country must pivot towards low-emission industries, such as green iron and lithium hydroxide, to align with global decarbonization efforts. Tim Buckley from Climate Energy Finance remarked that South Korea's decision should prompt Australia to reconsider its reliance on coal exports, as its key trading partners are increasingly responding to climate science and treaty obligations.
Verbatim Quotes
- “Through the Alliance, we will kickstart our coal phase-out, as well as help the Alliance advance the coal transition worldwide,” — Kim Sung-hwan, South Korea's Climate Change and Energy Minister
- “For Australia to continue to rely on fossil fuel exports in the medium to long term is a risky strategy,” — James Bowen, Director, ReMap Research
- “This should send a strong reminder to Australia as the second largest exporter of thermal coal behind only Indonesia, that our key trade partners are responding to climate science and their treaty obligations,” — Tim Buckley, Director, Climate Energy Finance
