Economic Groups: "Greenhouse Gas Reduction Targets Do Not Reflect Industry Opinions... Request for Financial and Tax Support"

Production Facility New and Expansion Suspension, Overseas Relocation Forecasted to Have 'Negative Economic Impact'
Industry "Carbon Neutrality Scenarios Must Be Set Reasonably"

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Major economic organizations criticized on the 18th that the industrial sector's position was not properly reflected during the discussion process of the 2030 Nationally Determined Contribution (NDC) enhancement plan and the 2050 carbon neutrality scenario. They raised concerns that side effects such as overseas relocation and employment reduction could occur in relation to the implementation of the carbon neutrality scenario.

The Korea Employers Federation (KEF) expressed this position on the same day regarding the Carbon Neutrality Committee's plan to review and approve raising the 2030 NDC from the existing 26.3% compared to 2018 to 40%, and to pursue 'net zero' by reducing net greenhouse gas emissions by 100% by 2050.

KEF pointed out, "The 2030 NDC enhancement plan and the 2050 carbon neutrality scenario directly affect companies, but the industrial sector's position has not been sufficiently reflected as the Cabinet meeting approval approaches."

They added, "We express regret over the parts unilaterally decided by the government and the Carbon Neutrality Committee without sufficient social consensus and economic and social impact analysis within the short period of five months since the launch of the Carbon Neutrality Committee in May."

KEF also mentioned that the cost estimates for the economic burden that companies must bear in the mid to long term to achieve the 2030 NDC and 2050 carbon neutrality goals have not been disclosed, raising concerns about policy uncertainty.

Furthermore, they warned that such abrupt changes in greenhouse gas reduction targets could lead to negative impacts on the national economy, such as suspension of new or expanded production facilities, overseas relocation, and employment reduction, emphasizing, "It is necessary to fully reconsider the industrial sector's opinions and reasonably set the NDC targets and carbon neutrality scenario even at this stage."

The Federation of Korean Industries (FKI) also expressed regret in a statement distributed on the same day, saying, "Since the disclosure of the 2030 NDC draft, the economic and industrial sectors have requested adjustments to the targets, citing that our industry's energy efficiency is among the world's highest and that it is difficult to introduce revolutionary carbon reduction technologies, but these were not reflected at all."

They urged, "We request a thorough review so that the 2030 NDC can be reasonably established according to our economic conditions at the upcoming Cabinet meeting."

The Korea Chamber of Commerce and Industry (KCCI), through a statement by Senior Vice President Woo Taehee, expressed concern, saying, "Considering the domestic reality where the manufacturing sector has a high proportion and goods exports support the economy, the future journey to achieve carbon reduction and net zero will be a major challenge and burden not only for companies but also for the lives of the people." They also demanded that the government promptly prepare comprehensive support measures related to the enormous costs required for the development and commercialization of innovative carbon reduction technologies.