Industry Appeals "Carbon Neutral Facility Investment Faces Tax Credit Discrimination"

Environment Minister Han Jeong-ae Holds 'Carbon Neutrality 2050' Meeting with Samsung Electronics, POSCO, Lotte Chemical, Hyundai Motor, and Others

[Asia Economy Reporter Son Sunhee] Domestic major conglomerates, under pressure from the government's decarbonization policy, appealed to the government to at least expand tax credits for related investments. It is expected that the investment for facility conversion alone will reach trillions of won, but dissatisfaction arose as large companies received fewer tax credit benefits than smaller companies precisely because they are large corporations.

On the morning of the 26th, at the Grand Intercontinental Hotel in Gangnam-gu, Seoul, Minister of Environment Han Jeong-ae held a meeting with the industry regarding the '2050 Carbon Neutrality Promotion Strategy.' Attending the meeting were key representatives from major companies participating in the greenhouse gas emissions trading system, including Choi Si-young, President of Samsung Electronics; Kim Hak-dong, President of POSCO Steel Division; Kim Gyo-hyun, CEO of Lotte Chemical; and Gong Young-woon, President of Hyundai Motor Company.

In her opening remarks, Minister Han emphasized the necessity of the carbon neutrality strategy, stating, "With carbon border tax and ESG (Environmental, Social, and Governance) management linking environment and industry, if climate change response is delayed, companies will inevitably be left behind. Climate change response is a path we must take."

Following this, presentations on carbon neutrality promotion plans were given by POSCO, the Korea Cement Association, Korea District Heating Corporation, Lotte Chemical, and others. During this process, representatives from each company and industry requested practical support from the government, such as research and development (R&D) support for preemptive adoption of carbon reduction technologies, investment tax credits, and technology development contributions.

In particular, there was a proposal to ease the Ministry of Strategy and Finance's announcement at the end of last year regarding the revision of the Enforcement Decree of the Restriction of Special Taxation Act, which applies differential investment tax credit rates for new growth technology commercialization facilities as '3% for large corporations, 5% for medium-sized enterprises, and 12% for small and medium enterprises.' Additionally, the aviation industry, including Korean Air, mentioned the need for support to promote the production and distribution of bio-aviation fuel.

Regarding these industry requests, Minister Han stated, "We will review them together with related ministries." Meanwhile, the Ministry of Environment plans to prepare a carbon neutrality scenario within the first half of this year through industry opinion gathering and a national public debate, and reflect the enhancement of the 2030 national greenhouse gas reduction target in the national plan.