Did the Government Waste Money... Only 10% Commercialization of Overseas Greenhouse Gas Reduction Projects

Feasibility Study Cost Support Project
2 Cases Linked to Actual Commercialization Out of 21

[Asia Economy Reporter Joo Sang-don] It has been revealed that the proportion of greenhouse gas reduction projects supported by the government for feasibility study costs that actually led to business achievements is less than 10%. In other words, fewer than one out of ten projects resulted in successful outcomes. Most projects ended without results, causing government subsidies to go to waste.

According to data received by Rep. Yang Geum-hee of the People Power Party from the Ministry of Trade, Industry and Energy on the 28th, out of a total of 21 "Greenhouse Gas Reduction Project Support" cases conducted from 2016 to last year, only 2 cases (9.5%) were linked to actual business operations.

This project supports the feasibility study costs of overseas greenhouse gas reduction projects that domestic companies promote in developing countries for aid projects, orders, or investments. It was launched in 2011 to reduce risks for domestic companies' overseas businesses.

The "Feasibility Study on Biomass Combined Heat and Power Project in Vietnam" conducted in 2018 confirmed economic viability, leading Company A to directly invest about 13 billion KRW and start commercial operation of the power plant from last year. Also, the "Feasibility Study on Microgrid Project in South Pacific Island Countries" conducted the same year has completed investment linkage, and another company is expected to proceed with investment.

However, the remaining 19 cases were halted or terminated due to internal company circumstances or local conditions. The "Feasibility Study on Waste-to-Energy Project in Quang Nam Province, Vietnam" in 2018 was canceled due to the impossibility of investment linkage with local investors, and the "Feasibility Study on Greenhouse Gas Reduction Project through Optimal Management of Solar Panel Efficiency in Malaysia" in 2017 failed due to the non-signing of contracts by local companies. Rep. Yang said, "Domestic companies need to increase the performance of greenhouse gas reduction projects promoted overseas with government support."