Sejong, February 13 - On January 31, 2023, the Ministry of Environment (ME, Minister Han Wha-jin) announced its annual work plans for the Climate Change and Carbon Neutral Policy Office for 2023.

The Climate Change and Carbon Neutral Policy Office plans to foster green industries and use them as new opportunities for growth through three core tasks: △Strengthen policy execution capability for carbon neutrality to respond to climate change, △Transition to a low-carbon green society based on green industry and technological innovation, and △Establish a transportation system centered on clean air and zero-emission vehicles.

① Establish a national master plan and reduce substantial GHG emissions

The Ministry of Environment plans to prepare a national master plan for carbon neutrality and green growth by March 2023, including a specific roadmap of Nationally Determined Contributions (NDC). The Ministry will check the progress of the roadmap every year. The Ministry will present policy directions such as an energy mix combining nuclear power and renewable energy, low-carbonization of industries, the realization of a circular economy, and transportation systems centered on zero-emission vehicles. The goal is to achieve practical results in reducing GHG emissions. 

Based on the 'National Roadmap for GHG Reductions by 2030,' the Ministry will establish the 4th basic plan for the Emissions Trading Scheme earlier than the statutory deadline until December 2023. The roadmap will help companies prepare for mid to long-term policy changes that accelerate GHG reduction. The Ministry will also expand support for GHG reduction facilities (97.9 billion won in 2022 → 138.8 billion won in 2023) and consider introducing Carbon Contracts for Difference (CCfD)1 to encourage companies to invest in innovative reduction technologies. 

The Ministry will also continue to lessen the impacts caused by introducing the EU's Carbon Border Adjustment Mechanism (CBAM). While negotiating with the EU together with the concerned ministries, a dedicated task force will provide training and consulting to companies. The task force will also prepare guidelines to help Korean exporters fulfill their obligations to report emissions. A help desk will give the companies one-on-one support services. 

② Reinforce adaptation measures to prevent damage from climate change

The Ministry of Environment will develop the National Climate Change Adaptation Plan 3.5 to reinforce the National Climate Change Adaptation Plan 3.0 established in 2020 into an action plan to prevent damage from the worsening climate crisis. The Ministry plans to organize an expert committee, collect opinions from stakeholders, and finalize the Adaptation Plan 3.5 by June 2023 after receiving deliberation from the 2050 Carbon Neutrality and Green Growth Commission.

The Ministry will also help public institutions (62 institutions, ~April 2023) for which duties to establish measures for climate change adaptation were newly assigned. The Ministry will expand the government-industry adaptation consultative body by industry to increase each industry's capacity to adapt to climate change. 

By extending the targets subject to climate change impact assessment, the Ministry will call for planning authorities or operators to develop customized adaptation measures and reduce GHG emissions. Such efforts will apply even when constructing roads, airports, and waste treatment facilities from 2023.

③ Achieve carbon neutrality with the international community, led by the community and people 

The Ministry of Environment will expand local governments' supporting center for carbon neutrality to lower-level local governments to pursue carbon-neutral policies tailored to each region. The Ministry will also organize an ACT center2 in the Korea Environment Corporation (March 2023) and assist in operating local governments' supporting centers for carbon neutrality. By signing voluntary agreements between the Ministry, local governments, and local businesses and organizations, the Ministry will support the reduction of regional GHG emissions and spread the will of local communities to achieve net zero. 

The Ministry also promotes national campaigns to gear towards net zero with low-carbon lifestyles, focusing on circulating resources closely related to our lives to induce a consensus on carbon neutrality formed in our society into daily practice. For example, the Ministry will create college towns without single-use disposable products. It will also spread the supply of reusable containers to movie theaters and funeral homes that use a large volume of disposables. The Ministry will raise public awareness by producing campaign songs that reflect each theme of net zero. Further, the Ministry will increase the items that receive carbon neutrality action points, such as using reusable cups (tumblers, etc.) in coffee houses, expand the budget, and improve the operational system to guide daily practice based on the incentives.

The Ministry plans to expand the budget for Green ODA projects (4.5 billion won in 2022 → 12.4 billion won in 2023) for international environmental cooperation. The Ministry will also increase open-call projects to reduce international GHG emissions (5.4 billion won in 2022 → 10 billion won in 2023) to earn carbon credit to achieve NDCs by 2030 and contribute to implementing global carbon neutrality. By expanding Green ODA and international reduction projects, the Ministry intends to establish a virtuous cycle system that enhances the competitiveness of Korean companies and boosts their entry into overseas markets.

① Promote the green transformation of an economic and industrial structure 

According to K-Taxonomy's implementation in 2023, the Ministry of Environment will support projects to stimulate green finance in various ways. The Ministry plans to financially support companies for interest expenses for issuing green bonds worth approximately 3 trillion won (7.7 billion won, up to 300 million won per company). It will also develop and run educational programs for the private sector to boost green finance.

In addition, the Ministry will institutionally support to help companies effectively respond to increasing demands to strengthen ESG, domestically and internationally. The Ministry will reclassify industry that requires environmental data disclosure by reflecting international trends, such as the International Financial Reporting Standards (IFRS) sustainability disclosure standards. The Ministry will try to integrate them with related systems to ease the burden on companies. The Ministry will also provide ESG consulting services to analyze the environmental management system of 100 small and medium-sized companies and develop improvement plans for each key item. 

The Ministry will support building smart eco-factory to establish and spread eco-friendly production systems for manufacturing companies.

② Foster green industries and technologies to gain a foothold to expand overseas

The Ministry of Environment will support promising green industries to nurture them as new growth engines and train human resources based on industrial demand. The Ministry will strengthen customized support, such as consulting, market development, and commercialization fund, for prospective/early start-ups (15.8 billion won in 2023, up to 1 → 250 million won per company) and expand loans to finance them (300 billion one in 2022 → 370 billion won in 2023). The Ministry also plans to train top-level human resources in promising fields such as chemical safety management and the circular economy (51 specialized universities in 13 areas). And it will establish courses for fostering professionals (100 people) to support the corporate's ESG.

The Ministry will establish strategies tailored to each project to help green industries expand overseas and win contracts worth KRW 20 trillion in 2023. The Ministry will help green industries enter international markets by establishing a green industry alliance, linking green ODAs to help win contracts, and strengthening G2G cooperation.

The Ministry will heavily invest in developing mission-oriented green technologies to actively respond to market and environmental changes and create tangible results. The Ministry will also connect a newly established 'Environmental Technology Development Innovation Committee(tentative)' in which the public and private sectors participate with fields. The Ministry will enhance the competitiveness of the green industry to enter the overseas market by exploring promising technology that can export.

③ Create a foundation to spread green consumption and environmental education 

The Ministry of Environment plans to reform the eco-label certification system by considering consumers' experiences. It will prepare guidelines for promoting eco-friendly management to prevent consumer damage caused by environmental labels and advertisements. The Ministry plans to tighten the certification criteria on consumer goods, including camping supplies and tableware for infants and toddlers. It also plans to review standards for products that have lost marketability or distinction. On the other hand, the Ministry will diversify green product markets through collaboration with online distributors. The Ministry will reasonably update the administrative disposition criteria by setting a new fine system. This way, appropriate administrative dispositions can be made according to the severity of environmental labeling and advertising violations.

As environmental education in elementary and middle schools become mandatory in March 2023, the Ministry of Environment supports in various ways to enhance environmental education in each school and to improve teaching skills. The Ministry plans to provide educational courses for creative hands-on activities by utilizing the existing national, regional, and primary environmental education infrastructure. The Ministry will provide environmental education specialists. The Ministry will enhance teachers' competence by expanding both environmental training courses for school administrators and teachers as well as online training courses and employing more environment educators.

① Ensure public safety from air pollutants 

To reduce air pollutants, the Ministry of Environment plans to strengthen air quality standards, such as the annual average concentration of ultrafine dust, by reflecting the goal of the 3rd Comprehensive Air Quality Improvement Plan3 and the WHO's air quality guidelines.

The Ministry plans to implement the main tasks of the 4th Seasonal Fine Dust Management System, which has been in effect since December 2022, and evaluate the system's results by May 2023. During the 4th seasonal management, the goal is to reduce ultrafine particles by up to 10% more than the 3rd seasonal management system conducted from December 2021 to March 2022. In particular, the Ministry plans to prepare and implement all-out countermeasures in March to respond to high concentrations during spring.

The Ministry will expand its support to reducing pollutants in workplaces and daily life and to develop customized technology. The Ministry will change the method of supporting the installation of prevention facilities for small businesses. It will conduct a technical diagnosis before selecting companies subject to support and increase effectiveness by grouping businesses in heavily polluted areas, such as old industrial complexes, to support air quality and odor improvement. From 2025, the Ministry will promote a project to attach reduction devices to gas heat pumps, which will be newly managed as air emission facilities, and start a pilot project for odor improvement for small restaurants and meal service facilities. 

The Ministry will also develop technologies for air pollutant management, from measuring and analyzing air pollution throughout their life cycles. The Ministry will also develop technologies for zero-emission construction machinery. 

② Transition to zero-emission vehicles to create future environmental industries 

The Ministry of Environment aims to open the era of 700,000 zero-emission vehicles (cumulative) by accelerating the transition to zero-emission vehicles and constructing electric vehicle chargers and hydrogen stations. The government aims to expand subsidies for zero-emission vehicle purchases to 285,000 units (226,000 units in 2022).

These efforts will also continue to create a more convenient environment for charging zero-emission vehicles than gas stations. Electric vehicle chargers will first be expanded in transportation hubs (such as highway rest areas) and areas near housing complexes (cumulative: 200,000 units in 2022 → 280,000 units in 2023). Hydrogen fueling stations will be installed nationwide through preemptive administrative support (accumulated: 229 units in 2022 → 320 units in 2023).

The Ministry will also generate demand for zero-emission vehicles in the public and private sectors and induce automobile manufacturers to expand their supply. The Ministry plans to strengthen the goal of converting government-owned zero-emission vehicles (calculated by reflecting the conversion factor for each vehicle type) from the current 80% to 100% and increase the participation of private companies in converting to Korean zero-emission vehicles (326 companies in 2022 → 400 in 2023). Also, the target for supplying zero-emission vehicles by 2025 will increase from the current 8%-12% rate after consulting with stakeholders.

③ Reduce internal combustion vehicles with stakeholders

The Ministry of Environment will expand the support for the early scrapping of old vehicles from Grade 5 to Grade 4 to reduce the number of internal combustion vehicles. The Ministry plans to include Grade 4 diesel vehicles and construction machinery in the targets for early scrapping. One of the objectives is to drastically reduce support projects for attaching diesel particulate filters (35,000 units in 2022 → 15,000 units in 2023). 

The Ministry plans to strengthen the average GHG emission standard for compact cars after gathering opinions from stakeholders. After collecting stakeholders' feedback on the EU and US trends, the average GHG emission standard for compact cars will be strengthened from 70g/km by 2030.

"The Ministry of Environment will strengthen our efforts to achieve carbon neutrality and grow our green industry based on the experience and technology accumulated through this process," said Keum Han-seung, Deputy Minister of the Climate Change and Carbon Neutral Policy Office at the Ministry of Environment. "We will also support the overseas expansion of our green industry and use it as a new growth engine for Korea."

1 Carbon Contracts for Difference: Companies sign contracts with the government when investing in GHG reduction facilities. If the carbon credit price is lower than the pre-agreed price in the future, the government compensates for the difference

2 ACT center: Assist in planning, Consult for capacity building, expand cooperation Together

3 The goal of the 3rd Comprehensive Air Quality Improvement Plan: National annual average concentration of ultrafine dust concentration of 12㎍/㎥ in 2032 

[Source: Press Release (me.go.kr)]