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5.125. [renewable portfolio standards] RPSs are the principal measures that have been adopted to support the development of renewable energy in Korea. The Government also provides various subsidies, for example: The Housing Support Scheme provides grants to households that use renewable heating or electricity. In 2018, KRW 230 billion was granted to households, more than double the 2017 level (KRW 100 billion); • A government plan announced in 2017 expanded the discount on those electricity bills linked to renewable energy generation and consumption. Previously, renewable energy producers and end users had been eligible for a maximum discount of 10% on their electricity bills under the condition that the amount of green electricity produced or consumed exceeded 20% of the total. From 2017 to end-2020, the discount was raised to up to 50% of the renewable electricity generated and consumed.

5.129. The Korean New Deal initiative (Section 4.3.2), announced in 2020, aims to, inter alia, enhance the competitiveness of the manufacturing sector by increasing public investment in digital and green energy infrastructure (Section 3.3.1.2). MOTIE is in charge of preparing policies to promote the development of the manufacturing sector. It announced a number of policy reports covering green energy, the smart and green industrial complex, eco-friendly vehicles, and the digital transformation of industry. MOTIE has also been promoting private investment by making regulatory improvement to meet the target set at the RE100 initiative. [47]

[47] RE100 is a global collaborative initiative among companies committed to using 100% renewable energy.

5.137. (...) Imports of automobiles remained much smaller than export volumes. Notably, the share of electric cars in total imported vehicles went up about six times from 2016 to 2020, and the share of hybrid cars more than doubled. During the same period, the share of gasoline-fuelled cars increased while that of diesel engine vehicles declined.

5.141. To purchase, own, and use automobiles, various taxes are imposed (Table 4.11). The Government has been facilitating the development of eco-friendly cars by providing tax incentives.

Table 4.11 Vehicle taxes and tax reduction for eco-friendly vehicles, 2020
Use
Taxes: Fuel excise tax-transportation-energy-environment tax (...)
Rates: (...) 26% of the transportation-energy-environment tax

Table 4.11 Vehicle taxes and tax reduction for eco-friendly vehicles, 2020
Tax reductions for eco-friendly cars
Category: Hybrids/plug-in hybrid electric vehicles (PHEVs)
Individual consumption tax: Temporary tax reduction: maximum KRW 1 million per car (up to December 2021)
Education tax: Tax cut: maximum KRW 0.3 million per car (up to December 2021)
Acquisition tax: Temporary tax reduction: maximum KRW 0.9 million per car (up to December 2021)

Table 4.11 Vehicle taxes and tax reduction for eco-friendly vehicles, 2020
Tax reductions for eco-friendly cars
Category: Electric vehicles (EVs)
Individual consumption tax: 5% of ex-factory price
Temporary tax reduction: maximum KRW 3 million per car (up to December 2020)
Education tax: Tax cut: maximum KRW 0.9 million per car (up to December 2020)
Acquisition tax: Tax cut: maximum KRW 1.4 million per car (up to December 2021)

Table 4.11 Vehicle taxes and tax reduction for eco-friendly vehicles, 2020
Tax reductions for eco-friendly cars
Category: Fuel-cell electric vehicles (FCEVs)
Individual consumption tax: 5% of ex-factory price-Temporary tax reduction: maximum KRW 4 million per car (up to December 2022)
Education tax: Tax cut: maximum KRW 1.2 million per car (up to December 2022)
Acquisition tax: Tax cut: maximum KRW 1.4 million per car (up to December 2021)

5.142. In January 2021, the Government announced, as part of the Green New Deal Initiative (Section 4.3.2 and above), subsidies of up to KRW 19 million to buyers of electric cars, and up to KRW 37.5 million to buyers of hydrogen fuel-cell electric vehicles. The Government aims to install 96,000 electric vehicle charging systems and build more than 180 hydrogen stations across the country by the end of 2021, to provide a more convenient charging infrastructure. Subsidies for electric taxis, buses, and trucks will also increase.

5.148. The shipbuilding industry is undergoing a restructuring process to meet environmental requirements set by the International Maritime Organization (IMO). In particular, IMO strengthened the standards for ship emissions, such as sulphur oxide (SOx), nitrogen oxide, and carbon dioxide, to reduce marine pollutant emissions. SOx emission regulation, effective from 1 January 2020, aims to reduce the current sulphur emission from 3.5% to less than 0.5% worldwide. The shipping industry has to use low-sulphur oil, install desulfurizer, or purchase LNG fuelled ships.