[2022 Budget] 3.1 Trillion KRW Allocated for 'Energy Transition and New Power Industry Development'... 13.8% Increase from This Year

Ministry of Industry Budget Proposal

A total of 11.8135 trillion KRW allocated... 5.6% increase
R&D budget increased by 11.6% to promote large-scale preliminary feasibility studies

Energy transition, 1.7536 trillion KRW → 1.9509 trillion KRW
Expansion of renewable energy finance and distribution support
Support for large-scale offshore wind power development

New power industry, 1.0025 trillion KRW → 1.1842 trillion KRW
Newly allocated 598 billion KRW for climate response fund

Export-related budget cut by 235.2 billion KRW

[Sejong=Asia Economy Reporter Joo Sang-don] The Ministry of Trade, Industry and Energy has allocated a total budget of 3.1 trillion KRW for next year to foster the new power industry, including the development of stable grid connection and integrated operation technologies in response to the expansion of renewable energy distribution and the increase in the share of renewable energy generation. This is an increase of nearly 14% compared to this year.

On the 31st, the Ministry of Trade, Industry and Energy announced that the 2022 budget was set at 11.8135 trillion KRW, a 5.6% increase from this year.

The ministry increased the research and development (R&D) budget by 11.6% (575.6 billion KRW) from 4.9518 trillion KRW this year to 5.5274 trillion KRW next year, due to the expansion of technology development demand in preparation for eco-friendly and digital innovation and the promotion of new large-scale preliminary feasibility study projects. Excluding this, the non-R&D budget increased by 0.8% (51.8 billion KRW) from 6.2342 trillion KRW to 6.2861 trillion KRW.

The budget for next year to enhance industrial innovation based on eco-friendly and digital technologies and to strengthen competitiveness in promising strategic industries was increased by 14.5% to 5.8274 trillion KRW. Specifically, the budget for materials, parts, and equipment increased by 8.8% from 1.5478 trillion KRW to 1.6845 trillion KRW. The budget for materials and parts technology development increased from 710.9 billion KRW in 2021 to 841 billion KRW in 2022, and machinery and equipment industry technology development increased from 133.2 billion KRW to 158.1 billion KRW. A new budget of 184.2 billion KRW was allocated for the development of strategic core materials for self-reliance. Through this, the ministry plans to reduce dependence on overseas core materials and simultaneously secure supply stability by strengthening the development of strategic core materials that have a decisive impact on the supply chain of major industries.

The budget for the big three core strategic industries?semiconductors, bio-health, and future cars?was also increased by 34.2%, from 678.6 billion KRW to 910.8 billion KRW. Newly included budgets are 5.6 billion KRW for creating a growth environment for system semiconductor companies, 20 billion KRW for core technology development of AI semiconductors, and 15.3 billion KRW for Korea-led K-sensor technology development to lead the market.

To establish a global vaccine hub, new budgets of 4.1 billion KRW and 6.9 billion KRW were allocated for vaccine industry professional workforce training and advanced technology development for vaccine raw and subsidiary materials production, respectively. The national new drug development project budget increased from 15.1 billion KRW to 46.1 billion KRW.

To promote the use of digital technologies such as industrial data and artificial intelligence (AI), the budget for industrial digital transformation, which includes creating and spreading success cases and establishing standards and utilization and demonstration bases for digital data, was increased by 76.2%. The budget for fostering mid-sized companies also increased by 15.3%, from 71.8 billion KRW to 82.8 billion KRW.

In response to the industrial transformation era, the budget for business restructuring support was nearly doubled, increasing by 92.1% from 14 billion KRW to 26.9 billion KRW, to help companies overcome growth limits and boldly enter new promising fields.

A budget of 4.8721 trillion KRW was allocated for energy transition and new energy industry development, a 2.7% increase from this year. The energy transition budget increased by 11.3%, from 1.7536 trillion KRW to 1.9509 trillion KRW, to accelerate the transition from fossil fuel-based industrial structures to a low-carbon economy and to support equipment and power generation finance for achieving renewable energy 3020 goals. The renewable energy finance (loan) budget expanded from 534 billion KRW in 2021 to 726 billion KRW in 2022, and renewable energy distribution support increased from 313.3 billion KRW to 332.4 billion KRW. A new budget of 2.7 billion KRW was allocated for building a building-type solar power demonstration center, and the budget for public-led large-scale offshore wind farm development support increased from 7.5 billion KRW to 9 billion KRW.

The new power industry budget, including undergrounding power lines for safe and reliable power and communication supply and technology development for stable grid connection and integrated operation due to the increased share of renewable energy generation, increased by 18.1% from 1.0025 trillion KRW to 1.1842 trillion KRW.

The export and trade response budget was reduced by 19.7%, from 1.1862 trillion KRW this year to 952.6 billion KRW next year. This is due to the reduction of the trade insurance fund contribution budget, which was temporarily increased due to COVID-19, back to the pre-pandemic average level (350 billion KRW → 114 billion KRW), resulting in a 28.7% (235.2 billion KRW) decrease in export-related budgets from 818.7 billion KRW to 583.5 billion KRW. Budgets of 238.2 billion KRW for attracting foreign investment and revitalizing returnees, 12.2 billion KRW for trade security, and 96.7 billion KRW for responding to trade issues were allocated.

The 2022 budget plan prepared by the Ministry of Trade, Industry and Energy is expected to be finalized in early December after review by the National Assembly.