Publication Date: 05-2023
Perspectives Climate Research again utilized their own methodology to assess the Korea Trade Insurance Corporation (K-Sure) and the Export-Import Bank of Korea (KEXIM) – the official Export Credit Agencies (ECAs) of South Korea, for their alignment with the Paris Agreement.
Overall, K-Sure and KEXIM were rated with ‘Unaligned’ and therefore urgently need to speed up the progress towards aligning their activities with the Paris Agreement (assessment score 0.27/3.00 for both ECAs).
The study explores the main reasons for the score given such as significant support of fossil fuel activities (mostly oil and gas) overseas through its ECAs compared to other G20 countries and continued support to fossil fuel investments, which is incompatible with the objectives of the Paris Agreement and should therefore be urgently ceased following the examples of such countries as France and the UK.
Climate finance, such as the support for renewable energy, is negligible in both ECAs’ portfolios and must be ramped up to ensure that they contribute to the ecological transition rather than slow it down. Introducing effective incentive mechanisms and price discrimination tools across the portfolio can help steer Korean exporters from carbon-intensive to climate-friendly activities.
At the international level, South Korea is not a signatory of the Glasgow Statement on international public support for the clean energy transition and did not make commitments to phase out support to fossil fuels except for coal.
Moreover, according to the information available, Korean ECAs do not appear to be working to any significant extent with national exporters to transform fossil fuel-related value chains, incentivise low GHG emissions exports and ultimately achieve Paris Alignment.