Why Korea still lacks ethanol fuel adoption: an interview with Kim Sun-wook

Brazil already runs cars on pure ethanol, and countries like the Philippines and Vietnam blend it into gasoline to cut sulfur emissions. However, in Korea, low-carbon fuel has barely entered the domestic market. In this interview, Kim Sun-wook of the Korea Alcohol Group discussed how the company sources and exports fuel ethanol across Asia, why unclear government policy remains the biggest obstacle to adopting it domestically, and the natural limits like arable land that keep ethanol from being a concrete solution to emissions reduction.

First, could you tell us about the work you’re currently doing?

The company I work for is called the Korea Alcohol Group. Its original business was producing the raw material for soju, which is called “ju-jong.” The division I’m currently working in, KC&A, uses ethanol in two ways here in Korea: one is fermented ethanol—made from rice, cassava, and other such ingredients—and the other is ethanol imported from countries like the U.S. or Brazil. We use both types.

KC&A currently imports ethanol from overseas and uses it. Although our country hasn’t started doing this yet, countries like the Philippines and Vietnam are blending that ethanol into gasoline at a rate of 10% . Since gasoline naturally produces a lot of sulfur, ethanol—which is made from corn or sugarcane juice—is recognized as a fuel with significantly reduced sulfur content, which is why we’re now re-exporting ethanol to the Philippines and Vietnam.

You just explained that it’s being used as a means to reduce carbon emissions. Aside from that, are there any other initiatives your company is currently pursuing to comply with environmental regulations or reduce carbon emissions?

Well, since CO₂ is widely recognized as a cause of global warming, companies are now making efforts to reduce those emissions or prevent them from being generated in the first place. However, simply making these efforts doesn’t guarantee 100% , but in any case, what we’re currently doing at the company level includes recycling materials that have already been used, or using raw materials that have reduced CO2 emissions. In our case, we’re using raw materials that generate fewer greenhouse gases to produce fuel—such as blending 10% , or developing alternatives to the petroleum-based fuels currently used in most aircraft by incorporating ethanol or other eco-friendly raw materials.

Among the carbon reduction efforts you’re currently undertaking, what are some of the more challenging aspects?

In South Korea, environmental policies—as part of national policy—have inevitably lagged slightly behind those in Europe or Japan. Consequently, until the global community firmly establishes that this is the direction we must take, the policy direction remains unclear. From a corporate perspective, this creates a lot of confusion about whether we should proceed or not, and I think that’s probably the biggest obstacle.

As you mentioned, global interest in low-carbon solutions is growing. In your opinion, what role do you think fuel ethanol could play in the future energy transition?

Even now, in Brazil, for example, they probably blend the highest percentage of ethanol into gasoline globally—currently up to 30%, and in some cases, there are even cars that can run on 100% ethanol. So if you visit a gas station in Brazil, you’ll find some products that are 100% methanol. Ultimately, we’ll have no choice but to move toward eco-friendly fuels—or, even if they aren’t strictly eco-friendly, toward options that reduce greenhouse gas emissions as much as possible. 

However, summers are getting extremely hot these days, and these trends are inevitably linked to rising greenhouse gas emissions—specifically, the Global Warming Potential (GWP) index—which is continuously increasing. Since this isn’t a uniform rise across the board—some areas see increases while others don’t— there are a great many disasters occurring. So, looking at South Korea specifically, the largest sources of CO₂ emissions are exhaust gases from coal and natural gas used in power generation, as well as vehicle exhaust. Therefore, reducing those emissions will undoubtedly be very effective in cutting CO₂ and is the direction we need to take.

As you mentioned earlier, you said there are difficulties because our country’s policies aren’t very well defined. So, if policy proposals were to emerge in a certain direction, do you think they would be helpful?

If new policies are to be implemented, they will require government-level infrastructure investment and various tax incentives. However, South Korea has been very passive in this regard so far. I think progress would be accelerated if the government took the lead in providing such incentives to companies. After all, South Korea has committed to specific targets for reducing CO2 emissions by a certain date, but so far, those commitments have not been met at all . If we want to ensure these commitments are met going forward, the government needs to roll out more support measures so that companies can engage in this work more actively.

Earlier, you mentioned that fuel ethanol is now being exported overseas. Does that mean you’re also affected by policy changes in those overseas markets?

Of course. Japan has already announced that it will implement a 20% mandate nationwide in about 20 to 30 years, and not only that, but if you look at the countries currently implementing such policies, most are already at 5% to 10%. But the important thing is that, since we’re a company based in Asia, we’re currently targeting mainly Asian countries—the Philippines, Vietnam, and Japan—and conducting business there. Once the 20% standard is implemented domestically, we’ll likely be able to expand those efforts within Korea as well.

When identifying new business opportunities, I imagine not only environmental considerations but also business viability are important. What criteria do you use to strike a balance between these environmental and business aspects?

Well, the most important thing is that a company is an organization that pursues profit. So, if there’s no business viability, no matter how expensive the energy is, companies won’t just rely on government-subsidized sources—they’ll use other options and seek out other companies. Most new business ventures ultimately come down to whether they’re viable and whether they can generate a profit. So, in the case of green energy, companies must follow the direction set by government support policies and actively develop such technologies .

Since we’re a company, we simply source the raw materials—we’re not the ones reselling them to the market—so we have no choice but to follow market trends. When identifying such new business opportunities, the most important factors are ultimately whether there is demand for the product, whether it’s sufficiently profitable, and—since environmental considerations can no longer be ignored—whether it contributes to the environment from an ESG perspective. We review all these aspects when identifying new business opportunities.

Finally, if the low-carbon fuel market continues to expand in the future, do you have any thoughts on how fuel-grade ethanol could contribute to that market?

Even though ethanol is considered a low-carbon, eco-friendly fuel, it’s not a resource that’s available in unlimited quantities. Unlike oil, which is extracted from deep underground, ethanol has finite reserves, so we have to extract it from existing sources. It’s generally produced from corn and sugarcane, but since this requires arable land, production isn’t unlimited. Still, it’s a sustainable option compared to extracting finite resources from the ground.

So, we’ll need things like breeding programs to develop corn varieties that yield much higher harvests, and I think we need to ease some of the overall regulations to allow for the use of eco-friendly energy sources, not just ethanol.