Up to 100 Million Won for Textile Industry’s Low-Carbon Transition... Government Invites Applications for 2.2 Billion Won Program

Support for replacing old facilities and introducing carbon emissions measurement equipment
Strengthening MRV capabilities in response to the EU Digital Product Passport

Yonhap News Agency

The government will provide up to 100 million won in transition funds to textile companies that replace old facilities that emit large amounts of carbon or introduce equipment to measure carbon emissions. The aim is to support both the domestic textile industry’s transition to low carbon and the strengthening of its export competitiveness at a time when global carbon regulations are entering full swing.

On February 25, the Ministry of Trade, Industry and Energy announced that it will be accepting applications from companies wishing to participate in the "2026 Foundation-Building Project for Low-Carbonization of Textile Material Processes" from February 26 to March 25. This year’s central government budget for the program amounts to 2.2 billion won.

The textile industry is considered a sector with high energy consumption and carbon emissions because it uses high-temperature and high-pressure facilities in fabric manufacturing and dyeing processes. Recently, as global fashion brands have increasingly demanded carbon reduction across their entire supply chains, domestic textile companies are being required to calculate product-level carbon emissions and submit reduction plans. As the industry is also a backward industry that supplies materials to key manufacturing sectors such as automobiles, demand from prime contractors for the submission of carbon data is likewise increasing.

Since 2023, the government has been supporting the replacement of low-carbon equipment such as high-efficiency air compressors, low-power motors, and wastewater heat exchangers. Since last year, in response to the European Union’s Digital Product Passport (DPP), the scope of support has been expanded to include equipment capable of precisely measuring energy use, such as electricity meters and flow meters. The DPP is a system, targeted to be implemented in 2027, that will mandate the digitalization and disclosure to consumers of data covering the entire product supply chain, including raw material and component information, carbon footprint, and recycled material content.

In particular, this year the Ministry of Trade, Industry and Energy plans to establish an Information Strategy Plan (ISP) for the "Korean Industrial Supply Chain Data Platform for Responding to the Digital Product Passport." Previously, from December 2024 to June 2025, guidelines for building the platform will be prepared, followed by the establishment of the ISP in 2026 and the full-scale construction of the data space from 2027 onward, according to a phased roadmap. The ministry expects that, by preemptively strengthening textile companies’ capabilities in measuring, reporting, and verifying (MRV) carbon emissions through this project, a foundation will be laid for future platform linkage and data utilization.

The support ratio will vary depending on company size. Small and medium-sized enterprises and mid-sized companies can receive support for up to 70% of facility installation costs, while large companies can receive up to 50%. Selected companies will also be provided with consulting services from carbon reduction experts. For companies whose reduction performance ranks in the top 30%, the ministry plans to issue a "Carbon Reduction Certificate" to help enhance their external credibility.

Lee Minwoo, Director General for Industrial Policy at the Ministry of Trade, Industry and Energy, said, "Beyond carbon reduction itself, the capability to manage carbon data is now becoming an important source of export competitiveness," adding, "We will begin by supporting platform construction and data linkage and utilization in sectors such as textiles, where global carbon regulations are applied first."