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Research Reports

Research on a circular economy roadmap by securing the interministerial policy linkages : focusing on the case of electric vehicle batteries
  • Author Ji Hye Jo, Sora Yi
  • Researchers
  • Date 2020-10-31
Ⅰ. Introduction
o Circular economy is defined as an economic system that can extract the maximum value from resources and minimize waste by utilizing the recycled materials, in contrast with the existing linear economic system.
o For a transition towards a circular economy, it is important to reduce natural resource usage in production, improve processes to reduce waste generation, design products considering reuse and recycling, and expand the purchase and use of recycled materials.
o In this study, we investigated policies related to the circular economy by ministry (Ministry of Environment, Ministry of Trade, Industry and Energy, Ministry of Land, Infrastructure and Transport, Ministry of Science and ICT, etc.) and suggested the improvement, including a policy roadmap for a circular economy focusing on the ‘used electric vehicle battery’.

Ⅱ. A Survey on the Current Status of Circular Economy Policies
1. Status and direction of key policies in the EU circular economy
o Achieving resource efficiency is one of the key initiatives in the Europe 2020 strategy. The European Commission set the long-term goal to promote ‘zero waste’ through the conversion of waste into resources and to encourage reuse and recycling in 2014.
o In 2015, the European Commission developed and presented a detailed action plan through the Circular Economy Package, a comprehensive policy considering the entire life cycle of products.
o As part of the Green Deal, the new circular economy action plan was announced to emphasize sustainable product policies and to encourage the circular design of products by activating the use of secondary raw materials and by-products.
o In addition, the European Commission is promoting the participation of the members such as public institutions, companies, labor communities, consumers, and civic groups by establishing the EU circular economy stakeholder platform, and is providing a forum for public discussion where stakeholders can exchange best practices.

2. Status of key policies related to the circular economy by ministry in Korea
o We investigated policies in place related to the circular economy by ministry and categorized them into system, certification, technology, facility infrastructure, statistical system, financial investment, and governance.
o The result indicated that various ministries’ policies and technologies are related to the production, distribution, consumption, waste management and recycled material utilization.

Ⅲ. Methodology for Policy Establishment Considering the Key Elements of a Circular Economy
o Policy-making has been conducted through a series of processes for more desirable policy decisions by analyzing the essential issues of policies and enhancing the rationality of policy decisions through scientific and systematic analysis of policy objectives, policy measures, and groups subject to policy.
o Circular economy policies of the EU and 9 other countries were assessed and analyzed to see whether 10 factors were well presented, including the analysis of awareness about the issue, key strategies of the policy, related regulation or systems, key objectives of the policy, detailed plans and alternatives for policy implementation, incentives, funding plans, monitoring plans, and expected effects (impact analysis).
o In establishing policies for a transition towards a circular economy, it is important to strengthen the stakeholder participation and policy acceptance, securing incentives and finance for the industry, and monitoring by the public/private sectors.

Ⅳ. Current Status and Improvement of Circular Economy Policies in Korea: A Case Study of the Used Electric Vehicle Battery Sector
1. Case study: used electric vehicle batteries
o The number of batteries whose warranty period has expired is expected to increase according to the government's active policy of supplying electric vehicles (EVs).
o Resources such as cobalt and lithium can be recovered from used EV batteries. Therefore, it is important to manage the recycling of EV batteries in terms of resource recovery. Additionally, the batteries can be reused in various products such as energy storage devices (ESS) and e-bikes after first-life as EV batteries, so new industries for reuse of EV batteries need be supported.
o In this study, we examined the current status of policies of each ministry related to used EV batteries, and derive factors to establish the foundation of circular economy.

2. Improvement of policies related to used EV batteries in Korea
o Currently, the Clean Air Conservation Act and the Public Notice on Return of Electric Vehicle Batteries by the Ministry of Environment are in place in terms of policies related to used EV batteries, and these include provisions on subsidies, return, removal, and storage of batteries. However, procedures and regulations in subsequent stages need to be improved.
o In order to build the foundation for circular economy in the used EV battery sector, it is necessary to assess the management system by linking related policies among ministries in various stages ranging from subsidy provision, returning of the battery to the local governments, the separation (removal) of the battery, storage and transportation, performance evaluation, and reuse/recycling.

Ⅴ. Circular Economy Roadmap of Used Electric Vehicle Batteries by Securing the Interministerial Policy Linkages
o The Ministry of Trade, Industry, and Energy is in charge of the manufacturing and re-manufacturing of EV batteries and the major laws on collection, recycling, and disposal of EV batteries is the responsibility of the Ministry of Environment. In addition, other various ministries, including the Ministry of Land, Infrastructure and Transport and the Ministry of Science and ICT, are involved. Therefore, it is important that various ministries and agencies cooperate throughout the entire life cycle of EV batteries.
o For this purpose, it is necessary to come up with a 'circular economic strategy for EV battery'. Each stage of the value chain needs to be strengthened, from securing raw materials for production, manufacturing of batteries and electric vehicles, reusing and recycling batteries to supplying recycled materials.
o In addition to regulatory policies, various factors such as innovation, financial support, statistical management and monitoring, and governance (building stakeholder consultative bodies and platforms for participation) need be combined within the policy roadmap of the circular economy.