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[외교안보•정치] [송경진 회원] The urea water crisis and trust-building diplomacy (The Korea Times 2021.11.23)
Date: 2021-11-23
The Korea Times | 송경진 (사)혁신경제 사무총장, 前 세계경제연구원 원장
입력 2021.11.23
A "urea water" crisis has swept through Korea and its ripple effects are still very much underway. For industrial use, urea is a byproduct of the combustion of natural gas and coal. Korea has borne the brunt of China's recent export ban on urea, as it depends on the neighboring country for almost all of its urea imports. From January to September of this year, Korea imported 97.6 percent of its urea from China, according to the Ministry of Trade, Industry and Energy here.
The direct cause of the crisis has much to do with China's drastic cut in coal production, in line with its 2030-2060 carbon neutrality target. China's 2030-2060 pledge is to see a peak of carbon dioxide emissions by 2030, but achieve carbon neutrality by 2060 by obtaining 80 percent of its energy from non-fossil fuel sources.
China's economic recovery this year has required more power, which has been complicated by shortages. Global urea prices hit a 13-year high at $719 per ton last month, and prices are forecast to remain high or go even higher in 2022. Panic buying is widespread in fear of a delay in the resumption of imports and also due to a lack of trust in government action.
The urea water, or diesel exhaust fluid (DEF) crisis revealed that uncertainties in global supply chains as well as the unintended side effects of carbon neutrality commitments can transform previously easy-to-get, cheap materials into strategic ones. These circumstances quickly bring up again the critical importance of import-export diversification.
Diversification has been a long-standing industrial policy of the Korean government, the scorecard of which does not look very promising at this juncture. Diversification means moving away from inertia. It is a very difficult process and takes an enormous effort by the whole nation. But the "diversification" rhetoric of the Korean government and businesses often miss making a blueprint for this strenuous process. There is little time to stay surrendered to inertia, but we must get serious and lay out a blueprint for delivery.
The direct cause of the crisis has much to do with China's drastic cut in coal production, in line with its 2030-2060 carbon neutrality target. China's 2030-2060 pledge is to see a peak of carbon dioxide emissions by 2030, but achieve carbon neutrality by 2060 by obtaining 80 percent of its energy from non-fossil fuel sources.
China's economic recovery this year has required more power, which has been complicated by shortages. Global urea prices hit a 13-year high at $719 per ton last month, and prices are forecast to remain high or go even higher in 2022. Panic buying is widespread in fear of a delay in the resumption of imports and also due to a lack of trust in government action.
The urea water, or diesel exhaust fluid (DEF) crisis revealed that uncertainties in global supply chains as well as the unintended side effects of carbon neutrality commitments can transform previously easy-to-get, cheap materials into strategic ones. These circumstances quickly bring up again the critical importance of import-export diversification.
Diversification has been a long-standing industrial policy of the Korean government, the scorecard of which does not look very promising at this juncture. Diversification means moving away from inertia. It is a very difficult process and takes an enormous effort by the whole nation. But the "diversification" rhetoric of the Korean government and businesses often miss making a blueprint for this strenuous process. There is little time to stay surrendered to inertia, but we must get serious and lay out a blueprint for delivery.
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