The energy storage and smart grid industries are key areas for policies aimed at expanding renewable energy, improving grid efficiency, and achieving carbon neutrality . The opening of component, technology, and procurement markets
through free trade agreements (FTAs) is rapidly progressing. The global ESS (Energy Storage System) market is expected to grow by an average of 12-14% annually between 2025 and 2026, with explosive growth in demand for grid modernization and RE100-type power management, particularly in the EU, UAE, and ASEAN . Key risks include lithium and nickel price fluctuations , the expansion of CBAM , and mandatory battery recycling .
Risk factors | 2025-2026 Outlook | Influence (1~5) | Implications |
|---|---|---|---|
| raw material prices | Lithium and nickel prices continue to fluctuate | 5 | The need to diversify supply chains through FTAs |
| CBAM | Indirect impact of batteries and inverters | 4 | LCA and RE100 data are required |
| ESS fire regulations | Strengthening safety standards in each country | 4 | Integrated IEC/KC certification required |
| RE100 | Accelerating the Transition of Large Enterprise Supply Chains | 4 | Growing demand for ESS and PPA solutions |
| Procurement Standards | Expansion of the bidding system for public power grid projects | 3 | Utilizing the procurement chapter within CEPA and EUFTA |
FTAs offer not only tariff reductions in the ESS and smart grid sectors , but also benefits in technology procurement, component standardization, and R&D cooperation
. The EU, Korea-EU Comprehensive Economic Partnership (CEPA), and RCEP allow cumulative use of country of origin for power management, inverter, and battery components , and the establishment of a decentralized production supply chain
with RCEP member countries (e.g., Vietnam and Malaysia) is actively underway.
| field | FTA applicability | Major challenges | Management Points |
|---|---|---|---|
| Battery (HS8507) | CEPA·RCEP | Recycling/LCA response | CBAM-compliant authentication |
| Inverter/Converter (HS8501/8504) | Korea-EU-RCEP | CE and IEC standards differ | Standard Integration and Test Certification |
| power grid equipment | CEPA·Korea-EU | Complicated procurement bidding process | Procurement utilization within CEPA |
| Monitoring/SW | DEPA·IPEF | Data Security and Standardization | ISO27001·GDPR compliance |
Major exporting countries have different certification and procurement standards for ESS and power grid equipment, and
FTAs expand access to procurement markets and the scope of technology recognition.
market | Main items | MFN (basic rate) | When FTA is applied | non-tariff barriers | Comments |
|---|---|---|---|---|---|
| EU | ESS·Inverter | 2~5% | 0% | CBAM·CE certification | RE100 response is essential |
| UAE | Battery and power equipment | 5~10% | Phase-out through CEPA | Safety and Procurement Regulations | Korea-UAE CEPA Synergy |
| USA | ESS·Power SW | 0~4% | FTA low rate | Buy America clause | Local assembly and joint ventures are necessary |
| japan | power converter | 3~6% | RCEP application | Different from JIS standard | Standard integration in progress |
| ASEAN | Smart meters and DC equipment | 5~8% | RCEP cumulative | Certification and customs clearance procedures | Local production base glass |
The energy storage industry is a key player in reducing carbon emissions , but it is also a key target of battery recycling and LCA regulations . The EU plans to mandate disclosure of the carbon footprint of ESS batteries and reporting on the proportion of recycled resources used,
starting in 2026 .
System/Issue | Core requirements | Influence (1~5) | react |
|---|---|---|---|
| CBAM | Battery and component LCA report | 5 | Building international standard LCA data |
| ESG procurement | Disclosure of supply chain emissions and recycling rates | 4 | ESG Reporting System |
| Battery regulation | Recycling and carbon labeling | 4 | Compliance with EU Battery Regulation |
| RE100 | Establishment of ESS based on renewable power | 3 | PPA·ESS linked incentives |
| safety regulations | Strengthening IEC62933 and UL9540A certification | 3 | Obtaining international certification |
Korea: Battery, inverter, and power grid SW core technology hub (Samsung SDI, LG Ensol, KEPCO KDN).
EU: Demand for RE100 and CBAM-compliant ESS surges, expanding procurement market opening.
UAE: Promoting a joint smart grid and energy storage system project based on CEPA.
ASEAN: Focus on low-cost ESS assembly and operation, increasing demand for core Korean components.
US: Demand for ESS, centered on local procurement and IRA-linked financing, is growing.
Combining AI sentiment (α), global ESS investment indicators (β), and power industry sentiment (λ), moderate growth is expected
in the fourth quarter of 2025, driven by the effects of CEPA and RCEP and increased demand for RE100 .
variable | Δ(%) or exponent | analysis |
|---|---|---|
| ΔExport_now | +3.4 | Increase in ESS and inverter exports |
| ΔImport_now | +1.8 | Expanding battery material imports |
| ΔPrice_now | +0.5 | Reflecting raw material and transportation costs |
| ΔSignal_now | +0.043 | Positive news and strengthening investor sentiment |
| ΔFTAEffect | +0.40 | Cumulative effects of CEPA and RCEP |
| Forecast_3M | +0.68 | A gradual upward trend is expected for three months. |
Formula (summary): Forecast_3M = 0.5·ΔSignal + 0.3·ΔFTAEffect + 0.2·ΔPrice
field | Suggestion | Executor | Expected effect |
|---|---|---|---|
| CBAM response | Building a Battery and Inverter Carbon Data Platform | Ministry of Environment and Ministry of Trade, Industry and Energy | Stabilizing EU exports |
| RE100 incentives | Expansion of the PPA·ESS linked system | Ministry of Trade, Industry and Energy and Korea Electric Power Corporation | Reduce electricity costs and expand markets |
| Standards and Certification Harmonization | Promoting mutual recognition agreements for CE, IEC, and KC | Trade Headquarters·KOTRA | Reduce certification costs |
| FTA procurement | Entry into the procurement market based on CEPA and EUFTA | Trade Headquarters·KEPCO KDN | Expanding EPC exports |
| Technology investment | Expansion of tax credits for ESS and power grid SW R&D | Ministry of Strategy and Finance and Ministry of Trade, Industry and Energy | Strengthening technological independence and export competitiveness |
The energy storage and smart grid industries possess growth potential through FTA-based technology exchange, procurement market opening, and CBAM response .
Forecast_3M: +0.68 — Reflecting the effects of CEPA and RCEP and global RE100 demand.
Recommended strategies: ① Cumulative use of CEPA and RCEP ② Battery LCA management ③ Expanding procurement of RE100-type ESS ④ Promoting mutual recognition of standards and certifications.
