South Korea turns CO₂ into fuel in bold climate-energy push

South Korea has launched a major carbon capture and utilisation project to turn industrial CO2 into usable fuels. The initiative aims to boost energy security while cutting emissions. It follows growing concerns over the country’s heavy reliance on imported crude oil and feedstocks, especially with recent instability in the Middle East. The CCU Mega Project will run from 2026 to 2030 with 238 billion won in government funding. It targets CO2 from high-emitting industrial sites, converting it into sustainable aviation fuel, synthetic gas, methanol, and eco-friendly marine fuel rather than storing it underground.

LG Chem will handle the power generation track, using CO2 captured from thermal plants to produce jet fuel. POSCO Holdings will lead the steel sector track, turning steelmaking emissions into synthetic fuels and chemicals. At the launch, officials also showcased direct air capture technology, which pulls CO2 straight from the atmosphere.

The Ministry of Science and ICT has been preparing for a wider CCU market by uniting industry, academic, and research partners through the CCU Initiative. If technology trials by LG Chem and POSCO succeed by 2030, the project could establish a domestic supply chain for low-carbon fuels and industrial materials. The government estimates that CCU could replace 10% of jet fuel and 48% of synthetic gas demand by 2050. This ties the project directly to climate goals and long-term energy policy. Success would reduce dependence on foreign oil while supporting South Korea’s industrial transition.