South Korea will almost double financial support for solar, offshore wind and other renewable projects next year as it steps up efforts to cut greenhouse gas emissions and reduce dependence on fossil fuels.
The Ministry of Climate, Energy and Environment 2026’s budget has allocated KRW 648 billion (US$440 million) in finance for RE100 industrial complexes – industrial parks designed to be powered entirely by renewable energy – agrivoltaic solar and offshore wind, up 98.6 per cent from KRW 326.3 billion (US$221 million) this year.
Funding to support broader renewable energy deployment will rise 37.1 per cent to KRW 214.3 billion (US$145 million), as the government builds a next-generation grid to manage more distributed power sources and shift the system towards renewables.
Total spending by the climate ministry will increase 9.9 per cent year on year to KRW 19.16 trillion (US$13 billion), after the National Assembly approved the budget and fund management plan this week. Lawmakers added KRW 37.9 billion (US$25.7 million) to the government’s original proposal.
By sector, the biggest increases are earmarked for energy (up 36.4 per cent), resource circulation (14.8 per cent), natural environment (13.5 per cent), water management (12 per cent) and general environment and energy programmes (11.2 per cent). Budgets for air quality, environmental health and chemicals, and climate and decarbonisation will edge down by 16.5 per cent, 0.9 per cent and 0.2 per cent, respectively.
The ministry said the package is part of South Korea’s latest push to accelerate its transition away from coal and oil, backing cleaner power and higher efficiency in buildings and social infrastructure.
Next year’s budget also includes KRW 12 billion (US$8 million) for high voltage direct current (HVDC) technology to speed up construction of a “West Coast energy expressway”, and KRW 1.3 billion (US$882,000) to support heat pump installations at social welfare facilities.
“We will make thorough preparations so that people can feel the impact of these programmes in their daily lives, and ensure the 2026 budget is implemented without disruption,” climate minister Kim Sung-hwan said on Wednesday.
On transport, the government will hold per-vehicle subsidies for all electric and hydrogen models at this year’s levels in 2026, halting a long-running policy of annual cuts aimed at nudging the market towards self-sufficiency.
Buyers who scrap or sell a petrol or diesel vehicle and switch to an electric vehicle (EV) will receive up to an extra KRW 1 million (US$678), effectively raising the subsidy level for electric cars. The government has created a new KRW 177.5 billion (US$120 million) “EV transition support” budget line to fund the scheme.
A separate “EV safety insurance” programme will also be launched to address consumer concerns over liability in the event of battery fires.
EV uptake has been gathering pace in South Korea, helped by subsidies and a wider choice of models.
The country’s annual EV supply topped 200,000 units for the first time this year, reflecting broader national efforts to curb fossil fuel use and decarbonise the transport sector.
EV supply reached 201,000 units as of 13 November, doubling from 2021 when annual volumes first crossed 100,000. South Korea launched its EV deployment programme in 2011.
Passenger EVs made up the bulk of this year’s supply at 172,000 units, followed by 2,400 electric buses and vans and 26,000 electric trucks.
As part of wider decarbonisation efforts beyond the power and transport sectors, the ministry will also expand backing for reusable containers at cafés, regional festivals, baseball stadiums, and other venues that generate large volumes of single-use waste.
