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Korea and UAE sign MOUs for trade, industry & energy cooperation 2023-01-18

The Ministry of Trade, Industry and Energy (MOTIE) announced on January 15 that, on the occasion of President Yoon Suk-yeol’s state visit to the United Arab Emirates (UAE), a total of seven memorandums of understanding (MOUs) were signed between South Korea’s and UAE’s government ministries, institutions and companies for cooperation in energy (5 MOUs), industry (1), trade and investment (1).

MOTIE Minister Lee Chang-yang and UAE’s Minister of Industry and Advanced Technology Sultan Al Jaber signed the Korea-UAE Strategic Partnership on Industry and Advanced Technology (SPIAT) MOU and the Korea-UAE Comprehensive and Strategic Energy Partnership (CSEP) Joint Statement.

With UAE’s Minister of Energy and Infrastructure Suhail Al Mazrouei, Minister Lee signed the Korea-UAE Hydrogen Cooperation MOU. With the Economy Minister Abdulla Al Marri, he signed the Trade and Investment Promotion Framework (TIPF) MOU.

The Korea National Oil Corporation (KNOC) and Abu Dhabi National Oil Company (ADNOC) signed the Korea-UAE Joint Oil Reserve Project Agreement.

Korea Electric Power Corporation (KEPCO) and Korea Hydro & Nuclear Power (KHNP) signed the Net Zero Acceleration Program MOU with Emirates Nuclear Energy Corporation (ENEC).

SK Inc. and Mubadala Investment Company signed a Voluntary Carbon Market (VCM) Partnership MOU.

The two countries look forward to meaningful outcomes from the above MOUs and agreements.

The SPIAT MOU will be an opportunity for Korea and UAE to seek collaboration opportunities in accordance with UAE’s policy for industrial diversification, serving as the practical foundation for creating future growth engines in new industrial and high-tech areas, namely digital transition, mobility, aerospace and supply chain.

Through CSEP, the two countries can build a comprehensive energy cooperation platform for stronger collaboration in nuclear power plants, renewable energy, hydrogen, and CCUS (carbon capture, utilization and storage).

The Net Zero Acceleration Program MOU will promote Korea-UAE joint market entrance in third party countries’ nuclear power plant markets and future technology development in small modular reactors (SMRs).

The Hydrogen Cooperation MOU provides the basic framework for cooperation across production, storage, transportation and utilization of hydrogen as a clean energy.

The Joint Oil Reserve Project ensures Korea’s purchase priority on the contracted four million barrels of oil in the case of a crisis.

The VCM MOU is a private-sector partnership that aims to establish a private-led carbon market centered around Asia.

TIPF is a trade cooperation platform by which parties can respond to the shifting international trade order and pursue optimal trade collaboration strategies, covering issues in investment promotion, supply chain, digital, green, bio economy, logistics, business environment and technical barriers to trade (TBT).

It is anticipated that these MOUs and agreements will function as effective platforms for the following prospects in Korea-UAE industrial, energy, trade and investment cooperation.

In terms of industrial partnership, both sides can look forward to private sector collaboration and joint projects with third party countries via SPIAT, in areas like supply chain resiliency in pharmaceuticals and medical devices, as well as high-tech manufacturing equipment, parts and materials, smart farming and e-learning.

Building on the success of the Barakah nuclear power plant project, the two countries’ deeper energy cooperation can bring about the acceleration of global market expansion, and establish the basis for collaboration in SMRs and enhanced public-private collaboration in carbon and clean energy, such as hydrogen and ammonia. As for carbon, the VCM will be Asia’s cornerstone of various carbon mitigation projects.

With respect to trade and investment, a Korea-UAE joint platform can be developed in step with the Korea-GCC FTA negotiations in progress to further bilateral trade and UAE-bound exports diversification via logistics, halal certification and other projects. Increased investment within Korea and joint overseas investment from utilization of TIPF and UAE’s sovereign wealth fund, in turn, are expected to boost foreign investment in Korea’s domestic green, digital, bio and promising new industries.