The international community is faced with the dual challenges of securing stable energy and achieving carbon neutrality. This study approaches energy security from the perspective of energy transition and comprehensively analyzes key issues and cases of international cooperation in the area of carbon neutrality and energy security. Building on this analysis, the study offers implications for governmental measures to enhance energy security while facilitating the transition towards carbon neutrality.

Chapter 2 summarizes the concept of energy security from the perspective of energy transition. Energy security includes energy availability, accessibility, affordability and acceptability. The focus shifts from the availability and accessibility of fossil fuels to that of clean energy during the energy transition period. Price is important in the clean energy transition. It is also important to ensure stable and environmentally sustainable energy transition. Furthermore, fostering international collaboration to overcome individual country-level limitations serves as a cornerstone for contributing to global carbon neutrality while advancing energy conversion schemes.

Next, looking at the main characteristics of the recent energy market, the importance of “energy security” has been re-emphasized due to the recent outbreak of the Russia-Ukraine war. Accordingly, the EU is implementing policies to reduce its dependence on energy supply from Russia through the announcement of the Fit for 55 package and the REPowerEU plan. In addition, the United States is focusing on restoring its global leadership in the field of climate change, for instance by hosting the Leaders Summit on Climate, and is placing more emphasis on climate change in industrial support policies, such as including climate change as a key support target in the IRA. Meanwhile, Korea has been pursuing energy transition to achieve a low-carbon economic structure. With its recent dedicated focus on energy security, it is unveiling policies and external strategies that consider both energy security and carbon neutrality.

In Chapter 3, we examine essential aspects to consider when pursuing carbon neutrality and energy security, transition to clean energy, critical mineral supply chain, and investment and institutional support. First of all, as the proportion of variable renewable energy (VRE) gradually increases in the energy transition process, it is necessary to compensate for volatility and promote stable power supply through measures such as energy storage devices, demand management, and distributed energy systems. In addition, there is a need to promote the commercialization of technologies that are still in the early research and development stage among advanced energy sectors such as nuclear energy, clean hydrogen, biofuel, and CCUS. Moreover, the advantages and limitations of natural gas and nuclear energy, which are used as transitional energy sources, must be taken into account when designing energy policies.

Next, the stable procurement of critical minerals required for batteries and renewable energy needs to remain an important policy. Demand for these critical minerals is expected to continue to grow in the future, while the distribution of production sites is concentrated in certain countries, making these inevitably vulnerable to security conditions. Meanwhile, as critical minerals have recently begun to attract attention as a major strategic asset, countries, mainly China, the United States, and Indonesia, are frequently implementing export control measures along with efforts to secure critical minerals. Therefore, it is necessary to respond to this.

Lastly, it is important to provide a market and institutional environment which enables carbon neutrality and energy security. The scale of public and private investment to achieve carbon neutrality must be expanded, and support is also needed for developing countries that lack the capacity for energy transition. Additionally, in the process of promoting carbon neutrality and energy transition, we must consider a just transition that embraces vulnerable groups and vulnerable industries. Lastly, there is a need to improve flexibility in the existing power grid and power system by taking into account the changing energy mix.

In Chapter 4, we analyze the status of international cooperation for carbon neutrality and energy security response, focusing on international cooperation cases for each major issue and major agendas and opportunity factors in major multilateral cooperation. Regarding the stabilization of the critical mineral supply chain, major countries are currently promoting various international cooperation projects such as the establishment of a bilateral and multilateral supply chain consultative body, supporting cross-border investment promotion using ODA, and signing a bilateral and multilateral trade agreement to bypass supply chain restrictions. Next, for energy transition, technology-leading countries such as Japan and the EU are promoting technological cooperation projects between countries specialized in green hydrogen and eco-friendly fuels, and are also actively participating in the process of establishing related international standards. In addition, we also reviewed the international investment initiatives and cases with particular emphasis on reducing risks and supporting early-stage clean energy investment in developing countries.

The main issues and opportunities for cooperation at the multilateral level derived from this study are as follows. The Indo-Pacific Economic Framework (IPEF) is seeking effective ways to revitalize the clean economy market and stabilize the supply chain under Pillar 3 (Clean Economy), and discussions at the G20 are focused on energy transition and circular economy. The Major Economies Forum on Energy and Climate (MEF) and the Clean Energy Ministerial (CEM) are supporting decarbonization of the industrial sector and clean energy technology innovation. It is expected that each country will be able to create synergy effects by selecting and participating in projects that overlap with their own policy goals and contribute to the international community among these activities.

In Chapter 5, building on the earlier discourse, the energy transition phase was segmented into three key stages: the introductory phase, the transitional phase, and the maturation phase. Furthermore, the chapter provided international collaborative measures within the energy transition process. Addressing the imperative of bolstering energy security in response to carbon neutrality necessitates an expansion of clean energy conversion while diminishing reliance on fossil fuels. The following countermeasures are proposed to achieve this goal.

First, the promotion of external cooperation to stabilize the critical mineral supply chain requires the following strategic considerations. To begin with, it will be necessary to use bilateral and multilateral cooperation channels related to critical minerals as an opportunity to strengthen networks and discover cooperative projects. In addition, it is necessary to promote a bypass strategy for export restrictions of major mineral suppliers by utilizing the revision of existing FTAs and conclusion of limited FTAs in the mineral sector. Finally, it is necessary to promote private participation in overseas resource development through overseas investment incentives and ODA project support.

Second, it is necessary to strengthen efforts to innovate new energy technologies and establish international standards. There are still many technical challenges to overcome in order to utilize new energy forms (especially hydrogen) in an environmentally friendly and economical manner. However, at the same time, it is expected to be a driving force in achieving carbon neutrality and energy security in the long term. Korea’s hydrogen-related technological capabilities are generally insufficient compared to developed countries, and efforts to establish international standards need to be strengthened. There is a need to effectively utilize energy-related bilateral dialogue with technologically advanced countries and programs of multilateral organizations such as the Major Economies Forum on Energy and Climate (MEF), Clean Energy Ministerial (CEM), and Mission Innovation (MI), and expand support from ministries for joint research with other countries. In addition, in order to lead the establishment of international standards, it is necessary to redefine the role and support needs of Korea's private sector, and support efforts in the long term.

Third, it is also crucial to expand the global clean energy investment. Creating a regulatory and institutional environment to promote clean energy investments such as a green taxonomy for eco-friendly economic activities or green bond guidelines is prerequisite. In addition, it is necessary to deepen the existing bilateral and multilateral energy cooperation system to seek cross-border clean energy investment opportunities, while discovering new cooperation partners with energy investment demands and potentials. Domestically, there is a need to analyze the costs and benefits arising from carbon neutral scenarios and energy mix changes and present an investment roadmap. Lastly, for energy transition in developing countries, Korea should consider participating in various innovative financial instruments and specialized funds in addition to ODA projects.