Welcome to Argus Weekly Korea Commodities Insights, your go-to source for what’s shaping South Korea’s energy and commodities markets. I’m glad you’re here because we’ve got three big stories this week that could change the game for power generation, coal imports, and industrial investment.
Let’s start with emissions trading. Seoul has just finalized its fourth emissions trading scheme plan for 2026 to 2030, and it’s a big deal. The government is expanding paid allocations for power generators while cutting the total number of allowances. Translation? Carbon compliance costs are going up, and that could finally make gas-fired plants more competitive against coal.
Here’s the breakdown: power sector allowances will climb from 15 percent in 2026 to 50 percent by 2030. Total allowances will shrink to 2.53 billion tonnes of CO₂ equivalent, down from 3.05 billion. Right now, coal is still cheaper—about 63 dollars per megawatt-hour compared to 85 dollars for gas. For gas to beat coal, carbon prices would need to hit around 30,770 won per tonne of CO₂e, way above today’s average of about 10,491 won. So, while we’re not there yet, the direction is clear. This reform is central to Seoul’s climate plan, aiming for up to a 61 percent emissions cut by 2035.
Now, let’s talk coal. South Korea’s thermal coal imports surged 31 percent in October to 8.2 million tonnes. Why? Restocking after a hot summer and gearing up for winter demand. Australia led the pack with 3.2 million tonnes—more than double last year. Indonesia followed with 2.5 million tonnes, mostly low-grade coal that’s perfect for winter blending. Russia stayed strong with 1.8 million tonnes, even though that’s down from September. No shipments came from the US or Canada, likely because Indonesian cargoes were more competitively priced. Looking ahead, Russian coal is expected to keep dominating, just like it did during the summer when imports hit record highs.
And finally, Hyundai Motor is making headlines with its biggest domestic investment ever—125.2 trillion won, or about 86 billion dollars, over the next five years. That’s 40 percent more than its previous plan. So where’s the money going? About 50.5 trillion won into AI, software-defined vehicles, electrification, robotics, and hydrogen. Another 38.5 trillion for R\&D, and 36.2 trillion for capital investment to upgrade production facilities. Hyundai wants South Korea to be a global EV export hub, targeting 2.47 million vehicle exports by 2030, including 1.76 million EV units. Its 200,000-unit EV plant in Ulsan is set to finish next year. Plus, Hyundai is investing in hydrogen infrastructure—a 1-gigawatt PEM electrolysis plant and a 30,000-unit hydrogen fuel cell facility by 2027. Hyundai Steel is also building an LNG power plant and upgrading blast furnaces. Big moves toward cleaner energy.
That’s a wrap for this week’s highlights: Seoul’s ETS reform could reshape generation economics, coal imports are strong heading into winter, and Hyundai is betting big on electrification and hydrogen. Want more insights? Email us at <seoul@argusmedia.com> to request access to the latest news and analysis.
Thanks for tuning in to Argus Weekly Korea Commodities Insights Highlights. Stay informed, and we’ll see you next week!
