South Korea built one of the world’s largest manufacturing economies without a large domestic supply of energy resources. Coal became important because it could be imported in bulk, stored at coastal sites and used to provide steady electricity for steel mills, petrochemical plants, semiconductor factories and densely populated cities. Modern ports and large power stations turned imported coal into a dependable part of the national energy system.
That model is now changing. Coal still supplies close to one-third of South Korean electricity, but nuclear generation has moved ahead of it, renewable capacity is expanding and the government has started to define a national coal phase-out. The transition is not a simple closure programme, however. South Korea must reduce emissions while meeting rising electricity demand from advanced manufacturing, data centres and electrification.
South Korea’s Coal Industry Begins at the Port
Domestic coal production is now very small and consists mainly of anthracite from a limited number of mines. The country therefore depends almost entirely on imported bituminous coal for power generation and coking coal for steelmaking. Australia, Indonesia and Russia are among its important suppliers, with additional cargoes available from countries such as Canada, Colombia, South Africa and the United States.
This import structure shaped the location of South Korea’s power fleet. Large coal stations were developed near deep-water ports so that fuel could move directly from bulk carriers to storage yards and boilers. Major complexes in Chungcheong, Incheon, Gangwon and the southern coastal provinces are connected to the national transmission network and to industrial demand.
South Chungcheong became the main coal-power region, with large stations at Boryeong, Dangjin and Taean. The concentration created employment, port activity and local tax revenue, but it also placed a high share of the country’s power-sector air pollution and carbon emissions in a limited number of communities. As a result, provincial governments became active participants in debates over plant closures and replacement industries.
Coal imports also expose South Korea to international freight rates, commodity prices, exchange-rate movements and geopolitical risk. Diversifying suppliers reduces dependence on any single exporting country, but it cannot remove the basic vulnerability created by importing nearly all fuel. Coal stocks at power stations provide a buffer against short disruptions, while long-term energy security increasingly depends on reducing the amount of imported fuel required per unit of economic output.
Thermal Coal and Steelmaking Coal Face Different Futures
Coal use in South Korea is divided between electricity generation and heavy industry. Thermal coal is burned in power stations, while metallurgical coal is converted into coke for blast furnaces. These markets are connected through import infrastructure but face different replacement options.
Power-sector coal can be displaced by nuclear generation, renewable electricity, storage, demand management and, in some cases, gas-fired capacity. The speed of replacement depends on grid connections and the availability of firm electricity during periods when solar and wind output are low. South Korea’s limited land area, high population density and lengthy project-development processes make large renewable projects more difficult than in countries with abundant open land.
Steelmaking presents a more difficult problem. Integrated steel plants use coking coal not only as a heat source but also as a chemical reducing agent that removes oxygen from iron ore. Electric-arc furnaces can reduce coal demand when sufficient scrap steel is available, while hydrogen-based direct reduction may provide a lower-carbon route for primary steel. Both options require major investment, new infrastructure and a dependable supply of low-carbon electricity or hydrogen.
This difference means that coal-fired electricity can decline faster than total coal imports. Even after power stations begin closing, South Korea may remain an important buyer of metallurgical coal unless its steel industry changes production technology on a large scale.
Nuclear Output Is Already Reducing Coal Generation
The decline of South Korean coal power is no longer based only on future targets. It is visible in current generation data. Coal supplied about one-third of electricity in 2024, but stronger nuclear output reduced the number of hours that coal plants were needed.
During the first half of 2025, nuclear generation increased by 8.7% compared with the same period a year earlier, while coal-fired output fell by 16%. The start of Shin Hanul Unit 2, shorter reactor-maintenance periods and higher nuclear utilisation contributed to the change. Because nuclear plants generally have lower fuel costs than coal and gas stations, stronger nuclear availability can push fossil-fuel units lower in the dispatch order.
Renewables are also beginning to reduce coal demand, particularly during sunny daytime periods. Solar generation can lower the need for thermal power when output is high, although the system still requires flexible resources to balance evening demand. Grid congestion can restrict both renewable and conventional generation, making transmission expansion an essential part of coal replacement.
The result is a changing role for coal stations. Plants originally designed to provide baseload power may operate less often, respond more frequently to changes in demand and earn less revenue from electricity sales. Lower utilisation can weaken plant economics before formal retirement dates arrive.
The Phase-Out Schedule Is Now a Plant-by-Plant Decision
South Korea finalised its 11th Basic Plan for Long-Term Electricity Supply and Demand in 2025. The plan covers the period from 2024 to 2038 and gives a larger role to carbon-free generation while reducing fossil-fuel dependence. Older coal units are expected to retire or be converted, with nuclear and renewable capacity carrying more of the system.
The policy moved further in November 2025 when South Korea joined the Powering Past Coal Alliance. The government committed to stop building new unabated coal power and confirmed that 40 of the country’s 61 existing coal units would be phased out by 2040. The timetable for the remaining 21 units was left for further economic, environmental and public review.
That distinction is important. South Korea has begun a formal phase-out, but it does not yet have a final closure date for every coal plant. Some newer units may still be technically capable of operating after 2040. Decisions on those plants will depend on electricity demand, grid reliability, the speed of nuclear and renewable construction, and whether conversion technologies can operate at a reasonable cost.
Earlier policy often proposed replacing retired coal capacity with liquefied natural gas. Gas plants can provide flexible output and emit less carbon dioxide than coal when generating electricity, but they would maintain dependence on imported fossil fuels. The newer policy direction places greater emphasis on carbon-free power, although the exact mix of nuclear, renewables, storage, hydrogen and gas remains subject to future planning.
Coal Regions Need Replacement Industries as Well as Replacement Power
The closure of coal stations will affect workers, contractors, port operations and municipalities. Large generating sites support maintenance companies, equipment suppliers, transport services and local businesses. A credible transition therefore requires regional development plans before units close, not only compensation after employment disappears.
Coal sites also offer useful assets for redevelopment. They already have grid connections, industrial land, cooling-water systems, port access and a workforce experienced in complex energy operations. Depending on local conditions, former coal sites could host storage, renewable generation, synchronous condensers, hydrogen facilities or other industrial projects. Not every site will support the same replacement, and new projects may employ fewer people than the power stations they replace.
South Korea’s coal decline is likely to continue because nuclear generation is rising, renewable capacity is expanding and national policy now includes a formal phase-out process. The pace will be determined by the country’s ability to build transmission, maintain reliable low-carbon generation and support industrial regions through the change. Coal is moving away from its former baseload position, but the final stage of the transition will depend on how the remaining plants and steel-sector demand are addressed.
