Trend Faster decoupling of Korean energy demand from economic growth

Summary

The institute expects the link between Korea's economic growth and its energy use to loosen faster than in the past. Energy intensity, measured in tonnes of oil equivalent per million won of output, is projected to improve by 1.9 percent a year over 2025 to 2030. The main reason is that growth is expected to centre on industries that create high value added relative to their energy use, above all semiconductors, whose value added has surged recently. The relative weakness of energy-intensive industries such as steel and petrochemicals, a larger role for services and continuing efficiency gains add to the improvement. The outcome is an economy that can grow around 2 percent a year while its total energy demand barely rises.