South korea’s coal phase-out by 2040 puts pressure on australia’s fossil fuel economy

Australia faces mounting economic pressure to diversify away from coal exports after South Korea announced its commitment to eliminate all coal-fired power plants by 2040. The decision, revealed during the COP30 climate conference in Brazil, positions one of Australia’s largest coal customers firmly on the path toward renewable energy.

South Korea’s pledge involves joining the Powering Past Coal Alliance, an international coalition of approximately 60 countries and 120 sub-national entities dedicated to phasing out coal power. As Australia’s third-largest market for thermal coal—the type specifically used for electricity generation—South Korea’s transition represents a significant shift in global energy demand that could substantially impact Australia’s export revenues.

The announcement serves as a stark reminder of the economic risks facing Australia’s continued reliance on fossil fuel exports. Energy analysts are now urging the Australian government to accelerate its investment in green industries and prepare for an inevitable decline in international coal demand. This transition isn’t unique to South Korea; countries worldwide are making similar commitments to meet climate targets and reduce carbon emissions.

For Australia, which has built much of its modern economy around resource exports, South Korea’s decision highlights the urgent need for economic diversification. The country must now grapple with developing alternative export industries while managing the social and economic impacts on coal-dependent communities. The question remains whether Australia will proactively lead this transition or be forced to react as more international customers follow South Korea’s example.