Korea s Strategic Roadmap of Technology and Industry under

Korea’s Strategic Roadmap of Technology and Industry under Green Growth Paradigm President Prof. June Seung Lee, Ph. D -0 -

I. Green Growth and Green Industry II. Current Situation and Investment Target III. Green Technology R&D Roadmap -1 -

I. Green Growth And Green Technology

Changes in Future Society and Need of Green Growth I. Green Growth and Green Technology v Need to respond resource crisis and environmental problems Future Threat Three trends threatening our future – Global Warming (Hot), Globalization & Growing Middle Class (Flat), and Population Growth (Crowded) Combination of all these accelerates climate change and increases demand on natural resources and deepens energy polarization. v Regulatory support for the efficient use of resources and minimization of environmental pollution. Response Industry-oriented economic growth reached a limit in terms of environment and economy. Green growth is not an option but a must; However, Korea is facing a long way ahead. v Need to set a policy direction on GT R&D according to the environmental changes. Preoccupancy Policy Develop a new growth engine through GT and environmental regulation. Future-oriented low-carbon green growth was presented as a new national vision to overcome resource crisis such as high oil price and climate change. (President Lee Myungbak, in his Liberation Day speech) -3 -

Market Outlook of Green Industry I. Green Growth and Green Technology Global Market Global market to show an annual growth rate of 10. 2% - 1. 5 trillion in 2007 → 5. 7 trillion by 2020 Domestic market to show an annual growth rate of 13. 2% - 37 billion in 2007 → 230 billion by 2020 Domestic Market (Tri. Dollar) 6 3 1 ’ 07 ’ 12 High Eff. , Low Poll. , Vehicles ‘Greenization’ of industries to be accelerated - High efficient, low pollution vehicles (Hybrid, Electric, H 2, etc. ) : 0. 7% in 2007 → 31. 4% by 2020 47% 30. 5% - Rechargeable Battery (Li-ion, Redox flow) : 30. 5% in 2007 → 63. 0% by 2020 ’ 20 Rechargeable Battery 63% 31. 4% 24. 3% 0. 7% ’ 07 -4 - ’ 12 ’ 20

Concept of Green Technology I. Green Growth and Green Technology Traditional GT refers to eco-friendly resource technology such as renewable energy, clean energy, etc. (Technet, 07) ü Traditional GT : new & renewable energy, high energy efficiency technology, environmental technology, climate change adaptation technology. ü Technet : Bipartisan policy network of USA The concept of GT has expanded to include technological trends that support environmental sustainability and economic growth together. Fusion GT refers to low carbon, eco-friendly technology that drives low carbon green growth through making a synergetic fusion between IT·BT·NT, etc and between these new technologies and existing products & industries. -5 -

Expansion to Fusion Green Technolgy I. Green Growth and Green Technology Drawing fusion technological characteristics, creative and innovative, out of traditional green technologies which focus only on individual purpose, function and use. Technology Overcoming limitations of existing technology Traditional Green Technology & Industry Creation of New Industry & Employment Making the best of what Korea is doing well such as IT, BT, NT to the development of fusion GT, and being able to overcome the limitations of existing technology and creating new markets. Replacing existing technology with alternative ones, for example, production & storage of hydrogen using bio-mass & sunlight. Enhancement of existing industry Industry -6 - Creating New fields via cutting-edge fusion technology like electrical power IT, new energy, etc.

Roles of Green Technology I. Green Growth and Green Technology Roles of GT Pending Issues Worsening Energy Problems Improving Energy Independence by energy source and energy efficiency technologies. (Solar cell, atomic power, lighting LED, Intelligent grid (electrical power IT)) Fossil fuel running out, Korea importing 97% of its energy. Energy consumption per capita increases 5. 8% per annum. Protecting ecosystem by preemptive investment Adapting to Changes by Disturbed Ecosystem The average temperature of Korea rose about 1. 5% over the last 100 years, while the world gets 0. 74℃ warmer. As the average temperature of the world gets 2℃ higher, 15~40% of flora and fauna disappear. into environmental protection technology. (prediction of climate change, CCS, water quality management, control of toxic materials) Shifting to low carbon industries Emerging low carbon green industry via greenization of industry & space and zero-emission technologies. (Intelligent transportation & logistics, city revitalization, and virtual reality) Market for carbon emission reduction and green industry expected to grow to 3 trillion won by 1220. Green Technology Race to be more competitive among advanced countries like the U. S. , Japan and EU. -7 -

II. Current Situation & Investment Target

Korea’s Green Competitiveness II. Current Situation & Investment Target Green Competitiveness refers to the national competitiveness to realize green growth via low-carbon and green industry. Classification Japan Germany U. K. U. S. A. Korea OECD - Green Competitiveness Index (Rank) 112. 8 (1) 109. 6 (3) 109. 0 (4) 103. 2 (7) 97. 4 (11) 104. 3 - Low-Carbonization Index (Rank) 114. 0 (1) 105. 2 (6) 108. 3 (3) 101. 4 (9) 88. 2 (13) 104. 3 - Green Industrialization (Rank) 110. 9 (1) 110. 8 (2) 108. 5 (4) 103. 8 (7) 102. 3 (8) 103. 8 ※comparing with major 15 countries 11 th Overall Green Competitiveness Weakness 13 th Low-Carbonization Index Strength 8 th New, renewable energy application & energy efficiency Green Industrialization -9 - Science & technology, environmental management

Korea’s Overall Conditions II. Current Situation & Investment Target Steady Increase of Green House Gas Emission Level of GT Lower than Advanced Countries ü 16 th in the world for green house gas emission ü 10 th in the world for CO 2 emission Korea’s leading GT is around 60% of that of advanced countries üRenewable energy (62%) üatomic energy& nuclear fusion (64%) üHydrogen & fuel cell (55%), etc. Need to Implement the GT Development Strategy in National Scale Inclination to Import New technology Rather than Develop One Import Dependency: Solar Power 75%, Wind Power 99. 6% - 10 -

Issues by Type of GT II. Current Situation & Investment Target Not enough preparation for commercialization and export, to preoccupy rapidly-growing new, renewable energy market. Core original technology of solar cell not secured, and need to improve localization of manufacturing equipment for greater price competitiveness and to secure an economic scale of production. Insufficient verification, distribution & core original technology for enhancing energy efficiency Intelligent grid or electrical power IT needs governmental support to build a verification complex. For IGCC, not enough infrastructure like plants and not enough incentives to attract power companies. Urgent need to enhance green competitiveness of key industries and acquire living-based technology. Levels of eco-friendly city and city revitalization technology are 20~50%, so that technological competitiveness is in urgent need. Need to introduce certification system and reinforcement of regulatory standard in order to enhance the greenization of key industries. Not enough response capacity to climate change and resource circulation system in regard to domestic circumstances. Resource circulation and environment purification technologies do not meet international standards. Few information DB for the evaluation of environmental hazards. - 11 -

Governmental Implementation by Department Fusion GT Traditional GT R&D MEST Research on energy sources such as developing new & renewable energy and enhancing efficiency of electrical power; research on high efficiency green-tech. Mo. E Environmental green technology such as reducing air pollution, improving water quality and waste treatment. MLTM Base-type Fusion GT Mid & long-term, fundamental & original technology research and training; atomic energy & nuclear fusion research MKE II. Current Situation & Investment Target Research on eco-friendly method of construction and green technology in the field of marine energy. Fundamental technology applicable to every field through the fusion between IT, BT and NT. Mission-type Fusion GT Technology to create added vale in the industry and products specifically connected to each ministry’s mission through the fusion of IT, BT and NT. Selection of major fields for FGT in close consultation with related ministries / Implementation of R&D by the ministries according to their division of roles. - 12 -

Investment Target of Green Technology II. Current Situation & Investment Target R&D Investment Target Plans to double the R&D investment on green technology by 2012. R&D investment on green technology: from estimated 1 trillion won in 2008 to 2 trillion won by 2012. ü 7. 3 trillion won over 5 years, which is annual growth rate of 19%. Strategically Focus on fusion green technology. Total investment will be more than doubled “Green Technology includes IT, BT, NT, CT and goes beyond all these combined. ” (Pr. Lee Myung-bak, the Liberation Day speech) 2007 - 13 - 2012

III. Green Technology R&D Roadmap

Area of Strategic Focus Prediction III. Green Technology R&D Roadmap Production Consumption • Environmental load reduction and recycle Post. Process Technology Prediction Technology • Climate change prediction and evaluation High Efficiency Technology • Efficiency Alt. Energy Resource Technology • Alternative energy - 15 - Application Technology • Knowledge based pollutant free industry

Picking Technologies of Strategic Focus III. Green Technology R&D Roadmap Basic Technology like IT, BT, NT & Other Industrial Technologies Information based pollution free industry Climate Change Technology Monitoring & Prediction of Climate Change Impact Evaluation and Countermeasures Future Energy (Nuclear Fusion · atomic power), CO 2 Absorbent Renewable Energy Bio Energy Hydro Power Maritime Energy Geothermal Energy Green Energy Solar Power Wind Power Hydrogen & Fuel Cell Coal Liquefaction & Gasification Environmental Technology CO 2 Capture & Storage Energy Efficiency Green Home Green Car Energy-saving Home Applicances High-capacity Generation Energy Storage LED Electric Power IT Gas To Liquids (GTL) - 16 - Non-CO 2 Control Eco-Friendly Products & Process Environmental Health Environmental Recovery Resource Circulation Water Treatment Pollution Prevention

Investment Strategy for GT Development III. Green Technology R&D Roadmap To set investment direction in consideration of current investment scale, technologies and the timing of commercialization. R&D investment on GT of strategic focus will be more than doubled by 1012 from 1. 4 trillion won in 2008. Short-term, intensive investment Mid-term, intensive investment Long-term, Incremental Investment Technologies that require timely market entry by shortterm verification, distribution. → silicon solar cell, advanced reactor, lighting LED, high-efficiency, low pollution vehicles (hybrid cars, etc. ) ’ 08 ’ 12 ’ 20 ’ 30 Technologies needed to get dominant position in the market for mid-term competitiveness. → High efficiency low pollution vehicles (electric & fuel cell), virtual reality, green process, rechargeable battery, non-CO 2 treatment, water quality management, alternative water resource, waste cut-down Technologies that needs to be nurtured as the world leading ones. → fast reactor, nuclear fusion reactor, hydrogen energy, fuel cell, eco-friendly plant growing, IGCC, urban revitalization, eco-friendly building, intelligent grid, CCS, toxic materials, prediction, evaluation & adaptation of climate change Fundamental and original technologies that must be acquired by steady investment. → non-silicon solar cell, bio energy, intelligent transportation & logistics - 17 -

GT-Related Human Resources III. Green Technology R&D Roadmap Level of HR Required by Technological Area High-quality HR Rate by Technology Demand on high quality HR are the highest Original & Fundamental in original & fundamental technology. Verification & Distribution ※High-Quality HR Ratio = Growth Engine Masters & Ph. Ds / Undergraduates + Masters & Ph. Ds 0. 77 0. 69 0. 62 Number of HR Required by Technological Area R&D personnel in the 27 technologies of strategic focus will rise to 33, 000 by 2012 from 20, 000 in 2008. Supply will be made with hiring about 7, 000 unemployed people of related major and recruiting 14, 000, and by re-educating 9, 000 existing personnel and inviting 2, 700 HR from abroad. How to Acquire GT Personnel Job rotation of the existing personnel. - Qualitative more than quantitative recruitment is needed. (ex) green job rotation training Offering special courses at graduate schools and GT basic track at undergraduate schools. International projects to attract GT human resources from abroad. - 18 -

GT-related Regulatory Change Technology Concerned III. Green Technology R&D Roadmap Regulation Merits Eco-friendly Building High Efficiency, Low Pollution Vehicles Solar Cell, Bio Energy Green Process Changes in consumption pattern, Cut-down of energy consumption Installation of Energy Storage System Vitalization of battery market, Stabilization of power supply Reinforcing Standard for Energy Efficiency of Buildings Acquiring state-of-the-art energy efficiency technology; More energy savings of buildings Restricting Carbon Emission from Cars Intelligent Grid [Electric Power IT), Rechargeable Battery Real-time Energy Trade System No more trade barrier when exporting cars to Europe Electric Cars Only Lanes for Shortdistance Driving (120 Km/h → 80 Km/h) Enable to expand consumer market for electric cars Distribution System of Renewable Energy, strategically combining (FIT & RPS) Reinforcing Standard for Renewable Products & Facilities Reinforcing Standard for Eco-friendly Production Design and Tax Break for Building the Facilities. - 19 - Expanding domestic market for renewable energy and boosting export Increasing Reliability of the products & facilities Development of plant industry and Low carbon industrial sites

Challenges to Yield Results in Short Time III. Green Technology R&D Roadmap 7 Core Technology & Products to Be Developed or Commercialized by 2012 Lighting LED To be a growth engine by 2012 Improving Efficiency of Lighting Devices for Home and Industry over 120 lm/w from 80 lm/w as of now. Silicon Solar Cell To be commercialized early 2012 Completing the development of hetero-junction/ rear contact technology and high-efficiency, scalable module production technology. And raising energy conversion efficiency to around 16. 5% from 15% as of now. Hybrid Cars To be developed by 2010 Completing the development of LPG hybrid cars with CO 2 emission cut down by 30% and commercializing them by 2012. Intelligent Grid To be commercialized by 2011 Completing the development of Smart Meter, Networking technology, distribution connection technology and commercializing Advanced Metering System by 2011. Advanced Reactor To be developed by 2012 Completing the development of APR+ standard design technology, and starting to export OPR 1000, APR 1400, SMART, which have been already developed. Fuel Cell Products to be out for an early entry into the market no later than 2012 Completing the commercialization of 1 k. W PEMFC (Proton Exchange Membrane Fuel Cells) for home use. And starting to commercialize products for portable/ mobile devices like notebook computers. CO 2 Capture To be develped by 2012 Completing the development of 200~1000 MW CO 2 capture plant for trial service and test. And reducing the capture cost to 10$/ CO 2 ton by 2020 from 30$/CO 2 ton of 2008. - 20 -

Expected Effects Sscience & Technology III. Green Technology R&D Roadmap Securing World Class GT Ahead of Others. - GT will grow from 51% in 2008 to 94% by 2030. Making GT Next Generation Growth Engine. Economy - Soaring growth of domestic market and occupying the world market in advance. Environment Drastic Cut-down of CO 2 and Preservation of Environment - Less CO 2 emission thorough lessening dependency on fossil fuel and improving energy efficiency 90(%) 4. 1 (100 bil. dollars) 129 (1 mil. CO ton) 2 1, 185(1000) 80 51 481 1. 5 0. 6 ’ 08 ’ 12 ’ 20 Technological Advancement ’ 07 47 222 1 ’ 12 ’ 20 ’ 07 ’ 12 ’ 20 Job Creation Expanding Export & Domestic Market - 21 - ’ 07 ’ 12 ’ 20 Cutting down CO 2

Future Scenario of GT Development III. Green Technology R&D Roadmap GT Is the Key to Adapt to Climate Change 369 ppm(’ 00) 454 ppm(’ 30) 532 ppm(’ 50) CO 2 concentration would rise 44%('00~'50), (Balanced Development(A 1 B) Scenario(IPCC, ’ 07)) CO 2 emission Aadvanced Reactor Non-CO 2 Treatment CCS Lighting LED High Efficiency, Low Pollution Vehicles Silicon Solar Cell Highly Efficient & Clean Eco-friendly Building Hydrogen Energy Nuclear Fusion Reactor Bio Energy IGCC Fast Reactor Green Process Intelligent grid Fuel Cell ’ 08 ’ 12 Non-Silicon Solar Cell ’ 20 ’ 30 - 22 - ’ 50 Energy Sources

Green growth, contributing to Korean and Beyond Contribution to the International Community Improvement of the Quality of life National Development - 23 -

Thank You! - 24 -