Government Announces Tax Credit for New Carbon Neutral Technologies in Steel and Chemical Industries

Opening Remarks at the Policy Review Meeting and Vice Ministers' Meeting on Inflation
"Promotion of Green Finance Supply Worth 7.6 Trillion Won"

Lee Eok-won, First Vice Minister of the Ministry of Economy and Finance, speaking at the '36th Policy Review Meeting and 31st Vice Ministers' Meeting on Prices' held at the Government Seoul Office Building on the 22nd. (Photo by Ministry of Economy and Finance)

[Sejong=Asia Economy Reporter Moon Chaeseok] The government has decided to include carbon neutrality-related research and development (R&D) technologies of high carbon-emitting industries such as steel and chemical sectors in the tax credit targets to accelerate the 2050 carbon neutrality policy.

Lee Eokwon, First Vice Minister of the Ministry of Economy and Finance, presided over the '36th Policy Review Meeting and 31st Price-Related Vice Ministers' Meeting' at the Government Seoul Office on the 22nd and stated, "We will add carbon neutrality technologies of high carbon-emitting industries such as steel and chemical sectors to the 'New Growth and Core Technology R&D Tax Credit' targets."

Vice Minister Lee said, "Considering that the development of core technologies such as Carbon Capture, Utilization, and Storage (CCUS) is crucial for achieving carbon neutrality, we will expand support for R&D tax benefits," adding, "Using next year's budget of 500 billion KRW as seed money, we will also promote the supply of green finance worth approximately 7.6 trillion KRW."

The government has allocated a budget of 11.9 trillion KRW for the carbon neutrality sector next year, a 63% increase from this year's 7.3 trillion KRW. It also established a new climate response fund worth 2.5 trillion KRW for next year. Along with this financial support, the government is using tax benefits to encourage private companies' technology development.

Additionally, the government plans to complete early the preparation of the Green Classification System (K-Taxonomy) within this year, strengthen the functions of the 'Proactive Corporate and Labor Transition Support Group' that supports job transitions for workers in high carbon-emitting industries, and finalize the enactment and revision of related laws such as the 'Corporate Vitality Act.'