41 Billion Subsidy for Freight Transport Shift from Road to Rail

Eco-friendly Transportation... Subsidy Scale Up 46% Compared to Last Year

The Ministry of Land, Infrastructure and Transport announced on the 8th that it will expand the 'Modal Shift Support Project,' which provides subsidies to businesses and cargo owners who switch freight transportation from road to rail, this year.

This year, 4.1 billion KRW in modal shift subsidies will be provided, a 46% increase compared to last year's 2.8 billion KRW. This is also a 36% increase compared to the average annual support amount of 3 billion KRW over the past 10 years.

Rail transport is a representative eco-friendly transportation method, but it incurs additional costs related to transshipment such as loading and unloading, which are unnecessary in road transport.

Accordingly, the Ministry of Land, Infrastructure and Transport is implementing the Modal Shift Support Project, which reimburses the costs incurred when switching transportation modes from road to rail in the form of subsidies to cargo owners and others.

It is estimated that over the past 10 years, the Modal Shift Support Project has achieved a carbon emission reduction effect equivalent to planting 300 million trees.

The Ministry will hold a selection contest for modal shift project candidates from the 9th to the 19th. After evaluating applicants' modal shift volume plans, it plans to select contracted businesses in May.

Businesses that fail to be selected as contracted projects may be chosen as reserve projects within up to 30% of the budget and can receive subsidies if there is any remaining budget balance.

Kang Hee-eop, Director of the Railway Bureau at the Ministry of Land, Infrastructure and Transport, said, "Recently, carbon reduction in distribution processes as well as production has been emphasized," adding, "We look forward to active participation in the Modal Shift Support Project, which can contribute to revitalizing rail logistics."