Korea adds nuclear to green taxonomy, and reaction is mixed

Shin-Wolsong nulcear power plant in Gyeongju, North Gyeongsang [KOREA HYDRO&NUCLEAR POWER]

Nuclear energy is green, according to the Korean government, though what this means exactly depends on execution and how the international community, especially investors, interpret the designation.

So far, the world is unimpressed.

Nuclear as an energy source is included in the latest draft of the country's green taxonomy, which is a list of economic activities considered environmentally sustainable.

On Tuesday, the Ministry of Environment on Tuesday released the revised draft. Nuclear power is a new addition to the list. In the first draft, released in December, it wasn't on the list.

As nuclear power was classified as green energy, funding for reactors is expected to be easier.

The inclusion of nuclear energy in taxonomy will "likely contribute to the rebound of Korea's nuclear industry by attracting investment in the nuclear sector, securing investors, and lowering funding rate," said a spokesperson from Korea Hydro & Nuclear Power.

That may not be enough for overseas investors, as the Korean version of green taxonomy is more relaxed than that of the European Union (EU) in terms of nuclear waste disposal and accident-tolerant fuel (ATF) adoption.

The European Parliament on July 6 voted in favor of the European Commission's decision to grant the green label to nuclear energy, on the condition that a final disposal facility is built by 2050 for high-level radioactive waste, and the switch to ATF is completed by 2025. ATF is considered safer and more efficient.

Korea's green taxonomy guideline stipulates that nuclear plants have to use ATF after 2031. Detailed plans on locating and developing facilities for high-level radioactive waste storage and disposal are yet to be provided.

This gap between local and EU standards may undermine Korea's competitiveness in the global market, according to Energy Transition Korea, a non-profit forum of energy experts, corporations and organizations.

"By setting a standard that does not align at all with that of the EU's green taxonomy, which applied a strict condition to the inclusion of nuclear energy, Korea's green taxonomy will be reduced only to a policy to support and justify the construction of nuclear reactors in Korea," said Energy Transition Korea, in a statement released Tuesday.

"Korean green taxonomy should be able to help local companies adapt to the new global sustainability standard and boost their competitiveness in overseas market," the organization said. "However, suggesting nuclear-related rules that fall notably behind the international standards may only undermine the credibility of 'K-taxonomy'."

If Korea's nuclear power business fails to meet the European standard, it may not be able to attract loans or equity investments from European assets.

APG, a Dutch pension fund, on Tuesday said that Korea's nuclear business "cannot be considered eco-friendly if it fails to meet the EU standard," according to a KBS report Tuesday.

The lack of disposal facilities has been one of the biggest and imminent issues in Korea's nuclear sector. Temporary storage facilities for spent nuclear fuel at Korea's nuclear power plants are expected to reach their capacity from 2031, according to an Energy Ministry report released in December. But as the figure was estimated during the previous administration's nuclear phaseout, the remaining time may be even less than that.

In July, Korea released a tentative R&D plan to invest 1.4 trillion won ($4.3 billion) in building an interim storage facility for high-level nuclear waste by 2043 and a final disposal facility by 2060. Its deadline for developing the final disposal facility is 10 years behind the EU standard.

Jang Daul, a government relations and advocacy specialist at Greenpeace East Asia's Seoul office, said that "the purpose of government's plan" is achieving profit for local nuclear industry, and the inclusion of nuclear in K-taxonomy will "further slow the transition to renewable energy."

The K-taxonomy is expected to be finalized by the end of the year.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]