By 2030, National Energy Efficiency to Improve by Over 30%

Ministry of Industry Holds the 24th Energy Committee Meeting

Discussion on 'Energy Efficiency Innovation and Consumption Behavior Improvement Measures'
Pilot Project for 'Energy Cashback' Starting Next Year
Ban on Market Sales of Fluorescent Lamps from 2028

Energy Carbon Neutrality Innovation Strategy to be Announced on the 10th

[Asia Economy, Reporter Jusangdon] The government has decided to improve national energy efficiency by more than 30% compared to 2018 by 2030 through strengthening efficiency management of high energy-consuming workplaces and expanding tax and financial support.

The Ministry of Trade, Industry and Energy announced on the 6th that it held the 24th Energy Committee at the Korea Technology Center and discussed the 'Energy Efficiency Innovation and Consumption Behavior Improvement Measures' containing these details.

The Energy Efficiency Innovation and Consumption Behavior Improvement Measures specify the direction of energy efficiency innovation in response to changing conditions such as the 2050 carbon neutrality scenario and the upward revision of the 2030 National Greenhouse Gas Reduction Target (NDC) announced in October this year, and include key tasks necessary for the rapid implementation of carbon neutrality.

The goal of the improvement measures is to improve national energy efficiency (the ratio of energy consumption to GDP) by more than 30% by 2030 compared to 2018. The Ministry plans to strengthen efficiency management for high energy-consuming workplaces (using more than 2000 TOE annually) in the industrial sector, which accounts for about 60% of domestic energy consumption, and expand support such as tax, finance, and demonstration research and development (R&D). First, an 'Energy Efficiency Target Management System' will be introduced to set energy efficiency improvement targets for high energy-consuming workplaces and evaluate and manage their performance.

Excellent workplaces that achieve the targets will receive preferential treatment in ESG (Environmental, Social, and Governance) environmental evaluations and priority government loan support. For workplaces that fail to meet the targets, efficiency improvements will be actively encouraged through improvement recommendations.

From 2022, a pilot project focusing on incentives will be implemented first, and based on the results, the system will be supplemented and the main project will be launched from 2024. The Ministry expects that the main project will enable annual energy savings of about 1.8 million TOE (11 TWh), which is similar to the annual power generation of about four Boryeong coal-fired power plants (500 MW each).

Additionally, low-carbon technologies such as energy efficiency improvements will be added to the tax support targets for new and original technologies, and from 2023, green guarantees for renewable energy will be expanded to include energy efficiency investment fields, thereby expanding corporate support.

Efforts will also be made to induce national energy consumption reduction and changes in consumption behavior. To raise public awareness of energy consumption and encourage behavioral changes, a public participation energy-saving program called 'Energy Cashback' will be promoted. Participants compete in electricity saving levels with nearby apartment complexes and households and receive cashback according to their savings. The government plans to conduct a pilot project centered on innovation cities such as Sejong, Jincheon, and Naju starting in January next year and gradually expand it.

Through the reorganization of the energy-consuming device efficiency management system, low-efficiency devices such as fluorescent lamps will be gradually phased out from the market, and power consumption management will be strengthened by expanding the scope of the consumption efficiency rating system. The minimum efficiency standards for fluorescent lamps, which have less than half the luminous efficiency of LEDs, will be gradually raised from 2022, and the market sale of newly manufactured or imported fluorescent lamps will be banned from 2028 onward.

Widely used and energy-saving promising items such as dishwashers, portable air conditioners, and multifunction devices will be included in the mandatory efficiency rating system to strengthen power consumption management.

Along with this, the 'Energy Supplier Efficiency Improvement Obligation System (EERS)' will be fully implemented, assigning energy efficiency improvement targets to energy suppliers such as Korea Electric Power Corporation, Korea Gas Corporation, and Korea District Heating Corporation. After establishing the legal basis in 2022, the main project will commence. Energy suppliers will support the installation of high-efficiency equipment and systems with excellent savings effects for consumers including the general public and businesses to achieve the targets. The Ministry plans to gradually raise the mandatory targets. It is expected to save about 29.1 TWh cumulatively (2022?2030) based on electricity, which is similar to the annual power generation of about eleven Boryeong coal-fired power plants (500 MW each).

Park Ki-young, Vice Minister of the Ministry of Trade, Industry and Energy, said, "Carbon neutrality is an important national task that fundamentally changes the paradigm of our industry and energy. Now that the direction and goals of carbon neutrality promotion, such as the carbon neutrality scenario and NDC, have been finalized, it is more important than anything else that the government, industry, and the public all implement and practice it together."

Meanwhile, the 'Energy Carbon Neutrality Innovation Strategy' was also discussed at the meeting. As a follow-up measure to the 2050 carbon neutrality promotion strategy, it contains a mid- to long-term vision and policy tasks in the energy sector to achieve 2050 carbon neutrality and smoothly implement the 2030 NDC target. The Ministry plans to disclose this on the 10th.