"Beyond the climate crisis, toward a green future." This was the phrase displayed on the stage at the announcement site for the Korea-style Green Daejeon Exchange (K-GX) strategy, presided over by Choi Geun (President). Gyeong Je-bu (Prime Minister) announced that it would invest 1,000 trillion won in the green transition, including 200 trillion won in fiscal funds and 790 trillion won in climate finance, by 2035. Following this, representatives from the steel, solar cell, and home appliance Gi Eop-ui (CEO) took the stage one after another to introduce ten signature projects involving 220 trillion won in private investment. Listening to the announcement, I felt a sense of reality that I was witnessing an industry that built present-day South Korea declaring its intention to move on to the next generation.
However, as a climate tech startup investor sitting in that room, there was something that concerned me. It was because the place for innovative companies was not clearly visible within this massive blueprint. Climate tech startups do not stop due to a lack of technology. They stop because they lack their first customer, their first pilot site, and long-term capital. Even technologies verified in the laboratory cannot be sold if they are not run in an actual factory, and no one invests in technologies that have never been sold. Paradoxically, K-GX is the best opportunity to solve this problem. Steel, petrochemical, cement, and semiconductor factories that must change their processes are precisely the largest demand sources and pilot stages for innovative technologies.
Therefore, my first proposal is to attach an "Open Pilot Track" to each of the ten signature projects. Large corporations should open up part of their transition sites as testing grounds for startup innovation technologies, while the government shares the costs of piloting and the burden of failure. Products that pass verification should be purchased first through public procurement mechanisms such as innovative product pilot purchases. If pilot results are recorded as standardized data so that other demand companies and investors can use them together, large corporations will gain transition speed, and startups will obtain their first reference case. This is the path for the 220th trillion won project to become a transition of the entire industrial ecosystem, rather than just equipment investment plans by a few large corporations.
The second proposal is a control tower to move the 1,000 trillion won. The current funds are divided into budgets from multiple ministries and supply targets from five policy finance institutional investors, primarily in the form of loans and guarantees. While this is a sturdy support for companies in the growth stage, technologies that have not yet been verified need capital centered on equity investment that shares the initial risk. However, there is no entity responsible for taking on that risk and waiting for more than 10 years. What matters more than the size of the funds is whose timeline the money follows. Loans follow repayment schedules, and funds follow liquidation schedules. There is still no money that follows the timeline of technology.
Therefore, a public investment agency such as a "Climate Energy Investment Corporation" is needed. Even if only 1% of the 1,000 trillion won is allocated to long-term equity investment, it amounts to 10 trillion won. This agency must do three things. First, it should become an anchor investor that takes on the initial risk between policy finance and private capital. Second, it should connect the Open Pilot Track with investment so that companies passing pilots can access capital for the next stage. Third, it should manage in one place where the scattered funds flow and how much reduction and industrial performance they generate. When this role is established, K-GX can move from plan to market. Major countries already have such agencies, like the UK's National Wealth Fund and Australia's Clean Energy Finance Corporation. Above all, when public-private governance removes policy uncertainty, private capital will finally enter with confidence.
Climate tech is an industry with a high probability of failure. If you invest in 100 companies, most will disappear. However, if one or two succeed, the landscape of the industry changes. The power to create that one or two does not come from the government picking winners in advance. It comes from a structure where many companies are tested on-site and capital that waits until the end attaches to the surviving companies. What took the stage today were large corporations. For startups to stand together in the same place a few years later, we must design now the first stage and the waiting capital so that the 1,000 trillion won reaches them. Then K-GX will become not just a reduction strategy, but the next growth engine of South Korea.
[Money Today Startup Media Platform 'Unicorn Factory']
in FUTURE
