[2022 Budget] Full-Scale Investment in Carbon Neutrality... Ministry of Environment's Budget for Next Year 11.8 Trillion Won

[Sejong=Asia Economy Reporter Son Seon-hee] The Ministry of Environment announced on the 1st that it has set the total expenditure for next year's budget and fund under its jurisdiction at 11.79 trillion KRW. Next year's budget is 10.7767 trillion KRW, a 6% increase from this year (10.1665 trillion KRW), and the fund plan is 1.0133 trillion KRW, a 0.8% increase from this year (1.0049 trillion KRW). It also allocated 697.2 billion KRW to the newly established 2.5 trillion KRW Climate Response Fund for next year.

Among these, the Ministry of Environment's carbon neutrality budget is about 5 trillion KRW, accounting for approximately 40% of the total government budget (12 trillion KRW) related to carbon neutrality. It will be invested in expanding the supply of zero-emission vehicles such as hydrogen and electric cars, reducing greenhouse gas emissions in the industrial and public sectors, revitalizing green industries and green finance, and expanding carbon sinks.

The Ministry of Environment plans to support the supply of 28,000 hydrogen vehicles and 207,000 electric vehicles next year, aiming to distribute 1.33 million zero-emission vehicles by 2025. It also plans to expand related charging infrastructure to improve convenience for zero-emission vehicle users.

In addition, measures to reduce existing internal combustion engine vehicles will be promoted. With the goal of completely phasing out 'old diesel vehicles rated 5' by 2024, the budget for early retirement support will be expanded from 326.4 billion KRW this year to 345.6 billion KRW next year, while support for installing particulate matter reduction devices has been reduced.

In the industrial sector, support for greenhouse gas reduction projects by emission allowance target companies, which account for 83% of greenhouse gas emissions (based on 2019), will be expanded. The scope of existing greenhouse gas reduction facility support projects will be broadened, and the subsidy rate for small and medium-sized enterprises will be increased (from 50% to 70%) to encourage corporate participation in carbon neutrality. The budget allocated for related facility support has been significantly increased from 22.2 billion KRW this year to 87.9 billion KRW next year.

In the public sector, a new budget of 20.3 billion KRW has been allocated to support the introduction of renewable energy production facilities and high-efficiency equipment for institutions subject to the target management system.

Efforts to expand carbon sinks through the restoration of natural ecosystems such as national parks and wetlands will also be promoted. 28.6 billion KRW will be invested in wetland conservation management, 3.5 billion KRW in expanding carbon sinks in national parks, and 1.3 billion KRW in establishing a national carbon sink management foundation.

Additionally, budgets will be allocated to ▲ safe water supply and strengthening disaster and accident prevention ▲ minimizing waste generation ▲ reducing fine dust emission sources.

Kim Young-hoon, Director of Planning and Coordination at the Ministry of Environment, stated, "Achieving carbon neutrality by 2050 is a challenging task but a necessary path. Under this direction, next year's Ministry of Environment budget focuses financial resources on building the foundation for implementing 2050 carbon neutrality." He added, "Once finalized through National Assembly deliberations, we will do our utmost to prepare projects thoroughly to maximize effectiveness during the execution phase."