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Korea’s Policy Banks and Export Credit Agency Committed KRW 48.5 Trillion to Overseas Fossil Fuels in Five Years; Financed Emissions Could Reach Three Times the 1.5°C Pathway by 2030

As the United Nations Environment Programme warns that overshooting 1.5°C of warming is becoming increasingly difficult to avoid, and climate disasters intensify worldwide, a new analysis finds that emissions attributable to Korea’s three major public financial institutions could reach approximately three times the level consistent with a 1.5°C pathway by 2030 if current overseas fossil fuel financing continues.

On October 20, Solutions for Our Climate (SFOC) and the Korea Sustainability Investing Forum (KoSIF) released Off the Books: Financed Emissions from South Korea’s Public Finance for Overseas Fossil Fuel Projects. The report examines overseas fossil fuel financing by the Export-Import Bank of Korea (KEXIM), Korea Development Bank (KDB) and Korea Trade Insurance Corporation (K-SURE).

The study is the first to quantify these institutions’ financing alongside both financed emissions, calculated using the Partnership for Carbon Accounting Financials (PCAF) standards, and committed emissions—the total greenhouse gases the supported assets are expected to emit over their operating lifetimes.

Financed emissions capture only the share attributable to a financial institution’s financing activities and cease to be counted once the financing ends. The assets, however, may continue emitting for decades. The study therefore also estimates their lifetime committed emissions.

1. Five Years of Financing, Decades of Emissions

Between 2020 and 2024, the three institutions made 347 new fossil fuel financing commitments totaling KRW 48.5 trillion. Despite the escalating climate crisis, annual commitments more than doubled, rising from KRW 5.1 trillion in 2021 to KRW 13.5 trillion in 2024.

Figure 1. New overseas fossil fuel financing commitments and international policy developments, 2020–2024 (KRW trillion)

After excluding 34 cases involving duplication, refinancing and other adjustments, the remaining 313 commitments were estimated to support 2.9346 billion tonnes of lifetime committed emissions, measured in carbon dioxide equivalent (CO₂e). This is approximately 12–13 times Nepal’s cumulative CO₂ emissions from fossil fuels and industrial processes over the past 250 years.

Annual emissions from these assets are projected to peak in 2029 at roughly three times the 29.8–34 million tonnes of annual international emissions reductions the Korean government aims to secure. Korea counts mitigation outcomes acquired overseas under Article 6 of the Paris Agreement toward its nationally determined contribution (NDC). The findings expose a contradiction: Korea is purchasing emissions reductions abroad while financing substantially greater emissions overseas.

Of the 313 commitments analyzed, 294—or 94%—supported fossil fuel transport infrastructure, including carriers, terminals and pipelines. These included 284 fossil fuel carriers. Investment in this infrastructure does more than add individual assets: it extends the life of fossil fuel supply chains for decades.

Emissions from producing and burning the fossil fuels transported by these 284 carriers alone were estimated at 16.5239 billion tonnes. These cargo-related emissions are equivalent to one-eighth of the remaining global carbon budget for limiting warming to 1.5°C.

2. Business as Usual Would Put 2030 Financed Emissions at Three Times the 1.5°C Pathway

Figure 2. Emissions analysis under the scenario ending new commitments in 2027

The report assesses both the emissions consequences of financing provided over the past five years and those of future financing under three scenarios:

1. Business as usual: overseas fossil fuel financing continues.
2. Immediate halt: new financing commitments end in 2027.
3. Delayed transition: new commitments end in 2031, four years later.

Under business as usual, annual financed emissions attributable to the three institutions would rise from 4.33 million tonnes in 2024 to 6.12 million tonnes in 2030—approximately three times the level consistent with the International Energy Agency’s (IEA) 1.5°C pathway.

If new commitments end in 2027, financed emissions would decline as existing financing is repaid, falling below the 1.5°C pathway from 2040 onward.

That decline, however, reflects a reduction in the emissions attributed to financial institutions, rather than an equivalent reduction in actual emissions. Previously approved assets can continue operating after repayment. Even under the immediate-halt scenario, annual emissions from supported assets would reach 4.5 times their 2024 level by 2030. By 2040, those emissions would need to fall by approximately 98% to align with the 1.5°C pathway.

3. Public Finance Remains Outside Mandatory Climate Disclosure

The findings indicate that ending new fossil fuel financing alone will not deliver alignment with a 1.5°C pathway. Public financial institutions must also actively manage assets already operating or under construction, including through early retirement.

Public financial institutions in the UK and Europe have ended fossil fuel support while maintaining their core export credit functions. The European Investment Bank (EIB) has also made the development and disclosure of Paris-aligned decarbonization plans a contractual requirement for high-emitting corporate clients.

Korea’s public financial institutions, however, have yet to meet even the starting requirement: emissions disclosure. Mandatory climate disclosure is scheduled to begin in 2028 for KOSPI-listed companies with consolidated assets of at least KRW 10 trillion. Public financial institutions that operate with public funds remain outside its scope.

KEXIM, KDB and K-SURE all declared their support for the Task Force on Climate-related Financial Disclosures (TCFD) alongside the Financial Services Commission in 2021. Five years later, none has disclosed its financed emissions.

“In global discussions on emissions cuts, Korea may appear to face less scrutiny than countries with larger historical emissions. But following the money reveals a different picture,” said Yebin Yang, Researcher at SFOC and a co-author of the report. “Since Korea announced an end to coal financing in 2021, its fossil fuel financing has actually increased 2.7-fold.”

“Public financial institutions must be required to disclose financed emissions, end new fossil fuel financing and phase out support for existing projects,” Yang added.

“Disclosure is only the starting point for transition,” said Yoonseo Kang, Researcher at KoSIF and a co-author. “Public financial institutions can drive the transition by using financed emissions to set 1.5°C-aligned reduction targets and transition plans, and by requiring borrowers to meet the same standards as a condition of financing.”

Read the full report→

Contact: Yoonseo Kang(Lauren) Researcher yoonseokang@kosif.org