THE second-biggest importer of Australian coal, South Korea, is set to cut its demand because of climate-change policies.

Although there is no global agreement on climate change, South Korea is pursuing an ambitious plan to wean itself off fossil fuels and sharply boost green investment.

The ''green growth'' strategy, to feature at the G20 leaders' summit in Seoul next week, is intended to offer a blueprint for emerging economies wanting to cut carbon emissions without harming their economies.

A senior official from the Presidential Committee on Green Growth, Yeon-chul Yoo, said Seoul's move towards cleaner energy sources would lead to a gradual decline in its imports of coal and other fossil fuels in coming decades.

''The portion of fossil fuels [in South Korea's energy mix] will decrease from 40 per cent in 2008 to 30 per cent in 2030. It will take time,'' Mr Yoo said at a foreign investment conference this week.