On Friday, the government held a strategic briefing with leading carbon neutral industrial companies at the presidential office and announced its vision for a “great transition to carbon neutrality in the industrial and energy sector.” The event was held to mark the first anniversary of the government’s proclamation of Korea’s carbon neutrality. Government and private companies will invest 94 trillion won by 2025 to ensure carbon neutrality in the energy sector. The government plans to inject 61 trillion won (about $ 51.6 billion) of the total. The government will spend the investment on a Green New Deal that aims to transform urban, space and living infrastructure into environmentally friendly infrastructure and to diffuse low carbon energy.
The government will also put in place financial and fiscal support. It will increase from 13 to 59 the number of items eligible for tax deduction for investments in R&D in new growth technologies and foundational technologies. Conglomerates and large companies will be entitled to a tax deduction of up to 30% and 40%, respectively. A financial assistance program worth 35 trillion won (approximately $ 29.6 billion) will also be put in place to provide low-interest loans to carbon neutral companies. The government will increase its carbon neutrality R&D investment to 408.2 billion won next year, almost double the amount this year.
The government will increase aid to industries and regions that are expected to face difficulties due to the transition to carbon neutrality. It will support conventional service stations to support their transition to energy superstations that respect the environment. Areas that are expected to experience seismic changes, including job reductions, will be designated as “special just transition districts”. Specific measures will be developed after the entry into force of the relevant laws in March next year.
Teuk-Gyo Koo [email protected]