Energy Security Risk and a Green Transition Strategy for Korean Industry

The continuing military confrontation between the US and Iran has produced an energy shock much like the one of 2022. That shock exposes a structural vulnerability rooted in the gap between the pace at which fossil fuel systems are being wound down and the pace at which renewable systems are being built, and it makes the case for re-examining the green transition as a question of resilience under external shock rather than one of speed. Korea carries what this study calls a triple exposure structure: high energy import dependence, a large manufacturing share, and a high share of energy consumed by industry. That combination leaves the country especially vulnerable to a vicious circle in which energy price shocks erode corporate profitability and then depress investment. Operating margins at energy-intensive fi rms did in fact fall during the 2022 crisis. Major economies have each mobilized fiscal and financial instruments against transition risk in their own way, but Korea’s fiscal capacity and manufacturing-centered industrial structure limit how far those approaches can simply be transplanted. This study therefore proposes a risk-responsive transition strategy built on three axes: stabilizing costs in the short term by improving how industrial electricity tariff s are operated; securing investment capacity in the medium term by making transition fi nance effective and introducing carbon contracts for difference; and upgrading the industrial structure over the long term by accelerating the shift toward high-value-added industries.