Lessons from Korea’s energy efficiency policies in the industrial sector

In an economy driven by its vital industrial sector, tackling the advancing threats of high energy consumption and GHG emissions has been a key challenge for pursuing energy efficiency in Korea. To aid policy makers promote energy efficiency in the industry sector, this report offers a comprehensive overview of Korea’s energy efficiency policy experience, featuring six specific examples of current supply- and demand-side policy instruments based on distinct modalities. Drawing upon publicly available data and qualitative interviews with energy policy experts, researchers, and practitioners in Korea, the report finds that Korea has had (i) clear lines of authority and responsibility among ministries and implementing agencies; (ii) emphasis on hard-to-abate sectors and firms with high energy consumption; (iii) combination of mandatory and voluntary programs incentivizing firms of all sizes; and (iv) knowledge-sharing facilitation among private actors. In addition to a multifaceted policy mix, the analysis suggests that industrial economic plans should avoid a future where the economy becomes captive to economic structures that can constrain long-term energy efficiency gains.