Chungcheongnam-do, South Korea – Chungcheongnam-do Province convened its "Just Transition Fund Deliberation Committee" on April 24th to appoint new members and approve funding initiatives for the current year. The meeting, attended by Vice Governor for Political Affairs Jeon Hyeong-sik, alongside provincial and municipal officials and committee members totaling approximately 20 individuals, encompassed the presentation of appointment letters, a progress report on the Just Transition Fund, and the deliberation and resolution of proposed projects.

During the session, the committee meticulously reviewed and subsequently endorsed seven projects spanning four cities and counties – Boryeong, Dangjin, Seocheon, and Taean – all of which are anticipated to experience the repercussions of coal-fired power plant closures.

Key initiatives approved include financial assistance for small business facility improvements, the installation of new and renewable energy systems in public facilities, and the establishment of carbon-neutral energy self-sufficient pilot cities.

The "Small Business Establishment Facility Improvement Support" project, spearheaded by Taean County, aims to provide financial aid to local small business owners. This support will facilitate upgrades such as the replacement of outdoor signage, the installation of product display units, and interior and exterior renovations. Furthermore, the project will assist with hygiene and safety measures, including disinfection, sterilization equipment installation, and general sanitation.

In the realm of renewable energy development, Seocheon County's "Public Facility New and Renewable Energy Installation" project received approval. This initiative focuses on installing photovoltaic (solar power) systems at eleven public facilities within the region, fostering the growth of the local renewable energy sector.

Dangjin City's "Carbon-Neutral Energy Self-Sufficient Leading City Development" project, categorized under energy transition infrastructure development, was also endorsed. This program will offer subsidies for the installation of low-carbon solar and geothermal energy systems in residential properties.

Established five years ago, the Just Transition Fund represents a pioneering regional initiative designed to address the adverse impacts of aging coal-fired power plant shutdowns and support the transition towards a sustainable energy future. With a targeted capitalization of 10 billion KRW, the fund has thus far allocated 5.328 billion KRW to 20 distinct projects.

The 11th Basic Plan for Electricity Supply and Demand forecasts the gradual closure of 22 out of 29 coal-fired power plants within Chungcheongnam-do by the year 2038. The imminent shutdown of Taean Thermal Power Plant Unit 1 this coming December marks the initial phase of this transition.

The tangible consequences of power plant closures were starkly illustrated by the 2021 shutdown of Boryeong Thermal Power Plants Units 1 and 2. This event triggered a precipitous decline of 1,821 residents in Boryeong City, pushing its population below the 100,000 mark. The region also experienced a significant drop in its Gross Regional Domestic Product (GRDP) by 338 billion KRW, leading to a sharp 9.8% surge in the closure and temporary suspension rates of local small businesses in 2021.

Compounding these challenges is the anticipated relocation of the majority of replacement power generation facilities outside of Chungcheongnam-do. This raises substantial concerns regarding the erosion of the region's energy infrastructure and the potential for a structural crisis impacting employment and the broader industrial landscape.

In response to these pressing issues, Chungcheongnam-do Province is actively advocating for the enactment of the "Special Act on Support for Areas Affected by the Closure of Coal-Fired Power Plants" at the national level, urging the central government to assume responsibility for a just transition.

Currently, 13 legislative bills addressing this matter are under consideration, including a representative bill proposed by National Assembly Industry, Trade, and Energy Committee Chairman Lee Chul-gyu. The province is diligently lobbying the government and the National Assembly to ensure that the proposed legislation includes provisions for the establishment of a "Coal-Fired Power Plant Closure Area Support Fund" with a clear legal basis and the designation of affected regions as "Power Generation Special Zones."

Vice Governor Jeon emphasized the significance of the fund, stating, "The Just Transition Fund is a valuable asset for our province and a practical foundation for realizing energy justice. We will continue our efforts to ensure the effective management of the fund and to secure the enactment of the special act, so that the damages faced by our communities receive substantial support under the responsibility of the national government."

Additional Information & Context:

To provide a more comprehensive picture, it's important to understand the broader context of coal power phase-out in South Korea and the concept of a "just transition."

South Korea's Coal Phase-Out: South Korea, heavily reliant on fossil fuels for its energy needs, has been gradually moving towards cleaner energy sources. Coal power has been a significant contributor to the nation's electricity generation but is also a major source of greenhouse gas emissions and air pollution. The government has set targets to reduce coal's share in the energy mix and increase the proportion of renewables. This transition, however, poses significant challenges for regions heavily dependent on coal-related industries, including job losses and economic decline.

The Concept of "Just Transition": The term "just transition" originates from the labor movement and emphasizes the need to ensure that the shift to a low-carbon economy is fair and equitable for workers and communities. It calls for proactive measures to mitigate the negative social and economic consequences of industrial change, such as providing retraining and employment opportunities for displaced workers, supporting the diversification of local economies, and addressing environmental remediation.

Chungcheongnam-do's Leadership: Chungcheongnam-do's establishment of the Just Transition Fund in 2020 was a significant step in proactively addressing the challenges associated with coal plant closures. The province recognized the potential for severe economic and social disruption and sought to create a financial mechanism to support affected communities.

The Need for National Legislation: While Chungcheongnam-do's initiative is commendable, the scale of the coal phase-out necessitates national-level intervention. The "Special Act on Support for Areas Affected by the Closure of Coal-Fired Power Plants" aims to provide a legal framework and dedicated funding at the national level to support these regions. The proposed "Power Generation Special Zones" could offer incentives for new industries and businesses to locate in these areas, helping to diversify their economies and create new jobs.

Challenges and Future Outlook: The transition away from coal power is a complex and long-term process. Securing sufficient funding, developing effective retraining programs, attracting new industries, and addressing environmental concerns are crucial challenges. The success of the just transition in regions like Chungcheongnam-do will serve as a crucial model for other coal-dependent regions in South Korea and globally. The ongoing efforts to enact national legislation and the continued operation of the Just Transition Fund in Chungcheongnam-do signal a commitment to mitigating the adverse impacts and fostering a sustainable future for these communities.