[Changes Next Year] Implementation of Fisheries Public Interest Direct Payment System and Strengthening of Fuel Sulfur Content Standard to 0.5% for Coastal Vessels

Changes Starting from 2021

Marine and Fisheries Sector

[Asia Economy Reporter Joo Sang-don] Next year, the fisheries direct payment system will be expanded and reformed. In addition, the sulfur content standard for fuel oil used by coastal vessels will be strengthened to 0.5%.

The Ministry of Oceans and Fisheries introduced these changes in the "Changes in the Marine and Fisheries Sector in 2021."

◆Support for Export Logistics of Domestic Small and Medium Enterprises (SMEs)= To assist domestic export companies facing difficulties due to recent shortages of shipping space and rising maritime freight rates, support for shipping space from national shipping companies will be expanded. For the increase in new shipping capacity of national deep-sea shipping companies in 2021, 45% of the shipping space will be preferentially provided to relatively vulnerable small and medium-sized enterprises with urgent cargo demand, focusing on specific routes.

National deep-sea shipping companies plan to deploy at least two 8,000 TEU temporary vessels monthly on the trans-Pacific route, providing more than 50% of the shipping space to small and medium-sized enterprises. Additionally, the overseas allocated shipping capacity of existing regular trans-Pacific vessels will be readjusted to provide 350 TEU of shipping space weekly to SMEs through the Small and Medium Business Corporation.

Furthermore, by fostering a Korean-style shipowner business, a foundation will be established for national shipping companies to quickly secure vessels and deploy them on routes requiring additional shipping capacity. To this end, starting in 2021, the Korea Ocean Business Corporation will introduce an operating lease (BBC) system, leasing vessels owned by the corporation to shipping companies at competitive charter rates.

◆Expansion of Fisheries Consumption Promotion Projects= In response to concerns about decreased fisheries consumption in the first half of the year due to the ongoing COVID-19 pandemic and to mitigate price fluctuations between production areas and consumers, the government plans to expand the fisheries consumption promotion project budget from the existing 21 billion KRW to 39 billion KRW, holding more than eight discount events in total.

In particular, to increase consumer accessibility and convenience, participating sales outlets will be expanded from existing supermarkets to include consumer cooperatives and supermarket chains (SSM).

Additionally, the traditional market consumption promotion project linked with Zero Pay will be significantly expanded to 6 billion KRW (from 300 million KRW in 2020) to encourage increased fisheries consumption through traditional markets. However, in accordance with social distancing measures due to the resurgence of COVID-19, events will be conducted mainly online, and offline stores will strictly comply with quarantine guidelines based on the social distancing level.

◆Implementation of Fisheries Public Interest Direct Payment System= The fully revised "Act on the Operation of Direct Payment System for the Promotion of Public Functions of Fisheries and Fishing Villages," which was amended on May 26 this year, will be implemented on March 1 next year, expanding and reforming the fisheries direct payment system.

The existing fisheries direct payment system only supported fishers in disadvantaged residential conditions such as island areas or northern maritime boundary line regions. However, from March 1 next year, the system will diversify into types such as the "Management Transfer Direct Payment" paid to elderly fishers (aged 65 to under 75) who have transferred their fishing village cooperative membership to younger successor fishers aged 55 or under; the "Fisheries Resource Protection Direct Payment," which requires compliance with total allowable catch allocation as a basic obligation and at least two additional optional obligations; and the "Eco-friendly Fisheries Production Support Direct Payment," paid to those certified for eco-friendly fisheries products and complying with hazard analysis critical control point standards under the Agricultural and Fishery Products Quality Control Act.

In particular, to revitalize fishing village communities, the qualifications for joining fishing village cooperatives for the purpose of management transfer will be relaxed. Previously, only cooperative members by district could join fishing village cooperatives, but from March next year, even non-members can join. However, in this case, to promote mutual development between fishing village cooperatives and district fisheries cooperatives, the person must join the relevant district fisheries cooperative within one year from the date of joining the fishing village cooperative.

◆Strengthening Sulfur Content Standards for Fuel Oil of Coastal Vessels and Fuel Tax Reduction= From January 1, 2021, under the Enforcement Decree of the Marine Environment Management Act, the sulfur content standard for fuel oil used by coastal vessels will be strengthened to 0.5%. The stricter standard has already been applied to foreign-going vessels since January this year.

Accordingly, all coastal vessels, including fishing boats, will not be allowed to use or carry fuel oil exceeding 0.5% sulfur content from the date of their marine pollution prevention equipment inspection in 2021. Vessels not inspected in 2021 must comply with the same standard from December 31, 2021.

To reduce the burden on the coastal cargo industry due to the strengthened standards and actively encourage the switch to low-sulfur diesel fuel, the government will reduce the fuel tax by 15% on low-sulfur diesel used by coastal cargo ships. The reduction amount is about 78.96 KRW per liter. Combined with the existing diesel fuel tax subsidy (345.54 KRW per liter), coastal cargo ship operators will receive support for up to 80% of the fuel tax (528.75 KRW per liter).

◆Adjustment of Closed Seasons and Prohibited Sizes for 14 Species Including Squid= From January 1, 2021, revised closed seasons and prohibited sizes to protect spawning adult fish and juvenile fish of 14 species requiring resource management, including squid, will be implemented.

New closed seasons will be established for Spanish mackerel and black porgy (May 1?31) and common octopus (May 16?June 30). Prohibited sizes will be newly established for oil flounder and dragon flounder (20 cm, with 17 cm applied for three years) and herring (20 cm). Prohibited sizes and weights will be strengthened for starry flounder and marbled flounder (20 cm, with 17 cm applied for three years), halibut and cod (35 cm), squid (15 cm), large octopus (600 g), and black porgy (25 cm).