The following is a statement from Greenpeace East Asia Seoul office regarding the economic crisis triggered by the Iran war and an urgent call for the South Korean government to abandon its reliance on fossil fuels and accelerate the transition to a self-sufficient, renewable energy system.
The Korean-language version of this statement is available at: https://www.greenpeace.org/korea/press/36990/war_crisis_202603/
SEOUL – Greenpeace stands in solidarity with all those suffering from the Trump-Netanyahu war against Iran. We express deep concern over the human casualties and the destruction of daily life facing civilians in Iran and residents across the Gulf region.
The current crisis is more severe than the two oil shocks of the 1970s combined, warned Fatih Birol, Executive Director of the International Energy Agency. Naval blockades have choked food imports to the Gulf, while strikes on energy infrastructure threaten fresh water supplies. Attacks on nuclear facilities and refineries leave a toxic, long-term legacy on our soil and oceans.
The shockwaves of this conflict are hitting the heart of the South Korean economy. On March 24, the government activated a “Caution” alert for energy security, responding by easing coal power restrictions and delaying the decommissioning of aging plants. On the same day, QatarEnergy officially declared Force Majeure on long-term LNG contracts with South Korea and other global partners. With repairs to facilities expected to take three to five years, it is clear that contracts alone cannot guarantee physical supply.
This crisis extends far beyond the power grid. In the Yeosu National Industrial Complex, the blockade of the Strait of Hormuz has severed naphtha supplies, forcing petrochemical giants to slash operations. Plant utilization has plummeted from 90% to the 60% range.
The Korean government argues that Qatari LNG—representing 14% of imports—can be replaced by alternative sources. However, it ignores the core issue: LNG prices are determined by the global market. Even if physical supply is secured from the US or Australia, price shocks are passed directly to consumers. Our ongoing fossil fuel dependency ensures we remain trapped by geopolitical risks, a lesson unlearned from the 2022 Russia-Ukraine war.
Following that conflict, soaring LNG prices and System Marginal Prices (SMP) forced the government to suppress utility hikes to curb inflation. While rates remained steady, costs didn’t vanish; KEPCO’s 2022 operating loss hit 33 trillion KRW, with total debt reaching 206 trillion KRW, while KOGAS faces 14 trillion KRW in receivables. This massive public corporate debt will inevitably return as future tax hikes or rate increases.
Surging oil prices have also exposed structural flaws in transport. On the 13th, the government capped refinery prices, using tax money to compensate for losses. Additionally, the “temporary” fuel tax cut introduced in 2021 has been extended 20 times, and the government has now announced a further extension alongside a significant increase in the rate of reduction.
This financial support locks us into an oil-dependent system. By subsidizing internal combustion engines, the government weakens the incentive to switch to electric vehicles (EVs). Each new crisis triggers a predictable, vicious cycle of further tax cuts, mirroring the power sector’s retreat to coal due to a delayed renewable transition.
The petrochemical crisis also fuels inflation across the plastics industry. Our reliance on petroleum-based production ensures that supply chain instability—from naphtha to ethylene—results in repeated economic chaos. Current emergency measures are mere band-aids; we need a “Circular Economy” that breaks our oil addiction. Unfortunately, the government’s “Comprehensive Plastic Reduction Plan” still focus on waste management rather than reducing production at the source.
Greenpeace Seoul demands the South Korean government to:
- Redesign the 12th Basic Plan for Electricity Supply and Demand: The government must stop replacing retiring coal with LNG—a high-risk liability. We need a concrete roadmap to 100GW of renewable capacity by 2030 to build a resilient, shock-proof power system.
- End the Vicious Cycle in Transport: Structurally phase out public financial support on fuel tax cuts that lock us into oil dependency. Reallocate those funds toward EV subsidies, charging infrastructure, and public transit.
- Tackle Plastic at the Source: The government’s “1st Master Plans for Circular Economy” must become a national milestone that mandates the reduction of petroleum-based plastic production and enforces reuse systems.
- Protect the Most Vulnerable: Instead of regressive fuel subsidies, the government must provide direct income support to low-income households struggling with the soaring costs of heating and food.
- Full Transparency on Fossil Fuel Costs: The public deserves to know the true price of our dependency—including KEPCO’s mounting debt, the risk of stranded LNG assets, and the total damage to our manufacturing sector.
The lesson of this crisis is undeniable. When a strait is blocked, factories stop and the cost of living explodes. This is the inherent fragility of a fossil fuel economy.
Domestic renewable energy is not affected by naval blockades. EVs and bicycles run regardless of international oil prices. Wind and sunlight do not declare Force Majeure. The government must go beyond managing the current chaos and start building a system where the next crisis can never happen.
Media Contact:
Yujie Xue, International Communications Officer, Greenpeace East Asia, +852 5127 3416, [email protected]
