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Following Russia’s invasion of Ukraine, america and its allies put in place an in depth set of sanctions to restrict Moscow’s export earnings. Russian fossil fuels had been one main goal. Whereas South Korea joined the preliminary set of U.S. and EU sanctions on Russia shortly after the warfare started, Seoul didn’t undertake sanctions on imports of Russian fossil fuels. Nonetheless, regardless of not formally implementing vitality sanctions, South Korea has considerably lowered imports of Russian fossil fuels nonetheless.
Whereas South Korea’s reliance on Russian fossil fuels previous to the warfare was lower than Europe’s, instantly slicing ties with Russian suppliers would have been impractical. South Korea imports almost 98 p.c of its fossil fuels, which offer two-thirds of the nation’s electrical energy era. Russia accounted for slightly over 9 p.c of South Korea’s imports by each worth and quantity. South Korea was most depending on Russia for imports of coal (17 p.c) and naphtha (23 p.c), however Russia was additionally a provider of pure fuel (5 p.c) and crude petroleum (6 p.c).
Regardless of the problem of transferring away from Russian fossil fuels whereas Europe and different economies had been additionally searching for alternate sources, South Korea has made important progress in decreasing its dependence on Russia. When it comes to Russian income – the purpose of financial sanctions – South Korean imports of fossil fuels declined from $13.2 billion in 2021 to simply $5.5 billion final 12 months.
This shift was pushed on a company stage by Korean companies searching for to keep away from rising dangers from commerce in Russian fossil fuels. On a governmental stage, South Korea’s Indo-Pacific Technique requires elevated vitality safety and a shift to renewable vitality throughout the area in response to the instability in vitality markets created by Russia’s invasion of Ukraine.
After considerably decreasing imports of Russian crude petroleum and naphtha in 2022, South Korea eradicated Russian imports of the 2 merchandise final 12 months. Elevated imports from america, the United Arab Emirates, and Qatar allowed South Korea to cease importing Russian crude, whereas Russian naphtha was changed with rising imports from the United Arab Emirates, Algeria, Malaysia, Singapore, and others.
South Korea has additionally considerably lowered imports of Russian pure fuel, that are down 42 p.c by quantity since 2021. Whereas Australia and america have remained South Korea’s prime suppliers of pure fuel, each have seen declines in export volumes during the last 12 months. In Australia’s case export volumes are nonetheless above pre-war ranges, if down from their 2022 excessive. The lower from america is probably going because of the important improve in U.S. LNG exports to Europe because the warfare started to switch Russian provides. Along with provides from america and Australia, South Korea has been capable of improve LNG imports from Malaysia and Oman.
Regardless of its success in decreasing most fossil gas imports from Russia, South Korea has been unable to scale back its want for Russian coal, which now accounts for 81 p.c of South Korea’s imports of Russian fossil fuels by worth. If South Korea had been capable of considerably scale back its imports of Russian coal, it might largely cease utilizing Russia as an vitality supplier.
Probably the most important issue holding again South Korea’s skill to eradicate Russian coal is the decline in coal imports from Australia. They had been down 20 p.c in 2023 by quantity after declining almost 25 p.c in 2022. One of many causes for this was China’s determination to resume imports of Australian coal in 2023 after its casual ban through the pandemic. As nations scale back their dependence on Russia as an vitality supply, they’re having to compete for the restricted alternate options.
Coal at the moment accounts for greater than 40 p.c of South Korea’s electrical energy era, however beneath Seoul’s present vitality plans coal’s share of electrical energy era ought to fall to barely under 15 p.c in 2036. This will likely be achieved by retiring over 20 coal-fired energy vegetation over the following decade and changing their manufacturing with elevated nuclear energy and renewable vitality. As South Korea phases out coal vegetation it is going to current Seoul with a possibility to eradicate imports of Russian coal.
Whereas Seoul has not formally adopted a coverage of phasing out Russian fossil fuels, South Korea has made important progress in doing so because the warfare started. It has minimize complete imports of Russian fossil fuels by 58 p.c by worth, whereas eliminating imports of Russian crude petroleum and naphtha. There may be additionally a transparent path to decreasing and eliminating Russian coal imports in time as South Korea implements its personal vitality transition.
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