Decision on Preliminary Feasibility Study-Centered Projects Focused on Efficiency Relative to Budget So Far
Going Forward, Carbon Reduction Will Also Be a Priority… Ministry of Economy and Finance Expects "Considerable Impact"
[Sejong=Asia Economy Reporters Kim Hyunjung, Jang Sehee] The government will conduct carbon reduction evaluations for fiscal projects funded as early as next year. This means prioritizing carbon neutrality when promoting infrastructure projects such as civil engineering works and deciding on specific methods accordingly. For example, while preliminary feasibility studies (PFS) focusing on efficiency relative to budget have been central in reviewing highway and railway projects, it is expected that going forward, more weight will be given to options that positively contribute to carbon reduction.
According to the National Assembly’s Planning and Finance Committee on the 22nd, the Ministry of Economy and Finance submitted a "consent" opinion on the partial amendments to the National Finance Act and National Accounting Act proposed by Lee Won-young of the Democratic Party. These amendments require the preparation and submission of carbon reduction-conscious budget and settlement reports, fund operation plans, and fund settlement reports. The bill includes provisions to evaluate the impact of major fiscal project budgets on carbon reduction and to execute budgets and funds in ways that reduce carbon emissions.
The Planning and Finance Committee recently reached a tentative agreement on this bill at the Economic and Fiscal Subcommittee and plans to finalize the bill after additional discussions by March. Accordingly, if it passes the plenary session next month, carbon reduction evaluations will be mandatory for all fiscal projects starting from 2023 following a pilot project next year.
The Ministry of Economy and Finance has expressed the opinion that a phased implementation is necessary by establishing an operational foundation for the system, considering technical limitations in selecting target projects and measuring and analyzing reduction amounts. In particular, through consensus with related ministries such as the Ministry of Environment and experts, projects with easily measurable reduction effects will be prioritized and applied on a pilot basis starting from next year’s budget. A research project on specific detailed criteria and directions will be commissioned next month.
A Ministry of Economy and Finance official stated, "While comprehensively considering various factors such as whether individual projects are reflected and appropriate requirements, the intention is to prioritize carbon reduction, which has not been considered so far, as an important factor," and predicted, "There will be considerable impact."
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