Finalization and Implications of the 2035 Nationally Determined Contributions (NDC) Target

At a cabinet meeting held on November 11, 2025, the government finalized the 2035 National Determined Contributions (“NDC”) target to “reduce emissions by an upper limit of 61% and a lower limit of 53% compared to greenhouse gas emissions in 2018.” In response to continuous demands for establishing a more ambitious target than the 2030 NDC (a 40% reduction compared to 2018), the final plan was confirmed with a specific range, while there also have been concerns about weakening industrial competitiveness.

Under the Paris Agreement, the government is required to submit an NDC every five years. South Korea officially announced the 2035 NDC at the 30th Conference of the Parties (“COP30”) to the United Nations Climate Change Convention held in Belém, Brazil, on November 18, 2025, and plans to submit it to the United Nations within this year.

The key details of the 2035 NDC are as follows:

Key Details of the 2035 NDC

Taking into account the recommendations of the Intergovernmental Panel on Climate Change (“IPCC”) and the conditions of the industrial sector, a reduction target has been set to reduce emissions by an upper limit of 61% and a lower limit of 53% by 2035 compared to the net emissions of 742.3 million tons CO₂eq in 2018.
As means of achieving the NDC target, the government proposed various measures such as expanding the supply of renewable energy, decarbonizing fuels and raw materials, increasing the production of low-carbon products, implementing zero-energy buildings and electrifying heat supply, and expanding the use of electric and hydrogen vehicles. These will be detailed in the “Korea Green Transformation (K-GX),” which is scheduled to be established in the first half of 2026.
The below table shows the target emission reductions by sector and the primary methods of reduction.

Sector		Primary Methods of Reduction	Target Emissions by 2035* *Unit: million tons CO₂eq (Reduction rate compared to 2018)
Sector		Primary Methods of Reduction	Bottom Threshold	Upper Limit
Emissions	Power	Expansion of renewable energy (e.g., deregulating separation transactions, accelerating the issuance of licenses and permits, and promoting RE100 initiatives within public sectors) Expansion of power grid infrastructure, including the establishment of energy highways	88.3 (68.8%)	70.7 (75.3%)
	Industry	Strong support for innovation (e.g., incentives for low-carbon product production, support for carbon reduction facilities for high-emission companies, enactment of the carbon neutral industry act, development and demonstration of core technologies by major industries) De-carbonization of raw materials and fuel, electrification of processes	209.1 (24.3%)	190.6 (31.0%)
	Building	Electrification of heat supply based on chemical fuels (kerosene, LNG) Improvement of consumption efficiency (e.g., mandatory green remodeling of public buildings, strengthening of mandatory zero-energy building standards, establishment of a heat pump dissemination roadmap, and introduction of an exclusive electricity rate system)	24.2 (53.6%)	22.8 (56.2%)
	Transportation	Expansion of the proportion of electric and hydrogen vehicles (e.g., establishment of a mobility electrification roadmap, reform of subsidy and financial support systems for electric and hydrogen vehicles, expansion of the use of eco-friendly (such as hydrogen) railroads and sustainable aviation fuel) Improvement of fuel efficiency for internal combustion engine vehicles	39.3 (60.2%)	36.8 (62.8%)
	Refrigerants	-	27.4 (+18.6%)	25.5 (+10.4%)
	Agriculture, Food and Fisheries	Improvement of livestock manure treatment (development of activation plans for solid fuel from livestock manure) Use of renewable raw materials and expansion of new carbon absorbents (e.g., establishment of a national roadmap for plastic reduction, mandatory use of renewable raw materials, and a certification system for battery production using renewable raw materials)	20.0 (27.5%)	19.5 (29.3%)
	Waste		9.2 (52.6%)	9.0 (53.6%)
	Fugitive Emissions	-	2.6 (29.7%)	2.4 (35.1%)
	Hydrogen	Expansion of water electrolysis hydrogen production	8.1 (N/A)	6.5 (N/A)
Absorption and Removal	Absorbent	Sustainable forest management and revitalization of domestic timber use	-38.3	-39.3
	Carbon Capture, Utilization and Storage (“CCUS”)	CCUS technology development and commercialization	-11.2	-20.3
	International Reduction	Expected to be used as a supplementary means	-29.8	-34.0
Total			348.9 (53%)	289.5 (61%)

Implications

The government set targets based on a certain range format by referring to the cases of other major countries, such as the EU, during the establishment process of the 2035 NDC. The upper limit of 61% is interpreted as the target the government aims to achieve through full-scale support, while the lower limit of 53% is interpreted as the target linked to the design direction of the emissions trading system regulation. The strengthened reduction targets compared to the 2030 NDC were also mainly caused by changes in international greenhouse gas calculation guidelines (previously: 1996 IPCC guidelines applied; changed to: 2006 IPCC guidelines applied) and changes in the method of calculating reduction targets (previously: “total emissions in base year – net emissions in target year”; changed to: “net emissions in base year – net emissions in target year”).

The government now plans to establish a “Green Transition” that includes detailed tasks to pursue in fostering green industries over the next decade, beyond the 2035 NDC reduction targets. Specifically, government support is likely to be concretized to secure industrial competitiveness in fields such as solar power, wind power, power grids, energy storage systems (ESS), electric vehicles, batteries, and heat pumps. Close corporate responses to these government support projects and system reforms will lead to sustainable competitiveness. In particular, since high reduction targets have been set for the power, transportation, and building sectors among the 2035 NDC sectoral reduction targets, it is expected that detailed follow-up regulations and implementation plans for each sector will be discussed. While we expect an increase in cost burdens, such as investments in carbon reduction facilities and additional purchases of emissions permits, companies will need to utilize the monetary, financial, and tax support measures specified in the “Green Transition.” Furthermore, as the introduction of Carbon Contracts for Difference to promote early commercialization of low-carbon technologies and the strengthening of climate disclosure obligations are likely to be discussed, it is advisable to prepare corporate management strategies in advance.

[Korean Version]

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