1.

Circular Use Assessment System

Regarding the circular use assessment system on products whose circular use is expected to be difficult, the assessment standards have been further specified, taking into account: (i) the use of circular raw materials, eco-friendly materials, or eco-friendly construction methods, (ii) durability and ease of repair, (iii) possibility of circular use throughout the entire process of production, distribution, consumption, and disposal, and (iv) the impact of carbon emissions throughout the entire process of production, distribution, consumption, and disposal. Also, the hazard assessment standards have been deleted (Article 18 of the Act and Article 8, Paragraph 7, Annex 1 of the Enforcement Decree), and “market share” has been added as one of the criteria for selecting the subject of assessment (Article 8, Paragraph 5 of the Enforcement Decree and Article 11, Paragraph 2 of the Enforcement Rule).
 
The planning cycle for the circular use assessment has also been changed from three years to five years (Article 8, Paragraph 1 of the Enforcement Decree). In addition, if the circular use assessment finds a circular use difficult, the Government authority may recommend its improvement to relevant entities. If an entity fails to implement the Government’s recommendations, the Government authority may impose sanctions such as disclosing the assessment results, but also may provide support measures necessary for recommended improvement (Article 18, Paragraph 3 of the Act).
 

2.

System for Recognition, Designation, and Notification of Circular Resources (“Circular Resource Recognition System”)

Under the Circular Resource Recognition System, circular resources that satisfy certain criteria (such as being non-hazardous and having high value) and that are recognized by the Minister of Environment will be deemed non-waste (Article 21, Paragraphs 1 and 5 of the Act). In this regard, the Act relaxed the recognition criteria for circular resources so that if a business entity that discharges industrial waste does not dispose of the wastes to the outside but rather recycles them on its own in compliance with the recycling principles and requirements, such recycling will be deemed a paid transaction of waste (Article 21, Paragraph 1 of the Act and the proviso of Article 12, Paragraph 2, Item 2 of the Enforcement Rules).
 
With the implementation of the new Circular Resource Recognition System, the circular resources designated by the Minister of Environment are also considered non-waste to the extent that they comply with the purposes, methods, and standards for circular use that were also announced at the same time (Article 23, Paragraph 3 of the Act). In this regard, on January 1, 2024, the Notification on Designation of Circular Resources (the “Notification”) was published, and the Notification designated seven items as circular resources, including: (i) waste paper, (ii) scrap metal, (iii) waste metal cans, (iv) aluminum (among nonferrous metals), (v) copper (among nonferrous metals), (vi) waste batteries for electric vehicles, and (vii) waste glass and waste glass bottles. The Notification also announced requirements by item along with general requirements for each circular resource.
 

3.

Circular Resource Quality Certification System

The existing Circular Resource Quality Mark Certification System has been changed to the Circular Resource Quality Certification System. A business entity may obtain quality certification on circular resources that meet the criteria for foreign substance content, hazardous substance content, and establishment of quality management plan (Article 25, Paragraph 1 of the Act and Article 19 of the Enforcement Decree). A business entity may indicate on its packaging, containers, etc., that a product is a “product using circular resources” if circular resources account for at least 10% of the weight of raw materials that were used in the manufacturing process of the product (Article 26, Paragraph 1 of the Act and Article 20, Paragraph 1 of the Enforcement Decree).
 

4.

Regulatory Exceptions for New Circular Technology/Service (Regulatory Sandbox)

To promote new technologies and services in the field of the circular economy, the regulatory sandbox system was introduced as indicated below (Articles 27 through 34 of the Act).
 

(1)

System for Expedited Processing of New Technologies and Services for the Circular Economy (Article 28)
 
A business operator may request the Government authority to check whether it needs to obtain approval in connection with the circular economy. Except for cases where business operators are notified that they need to obtain approval under applicable laws and regulations or obtain temporary approval pursuant to Article 33, Paragraph 1 of the Act, business operators are free to launch new technologies or services for circular economy (Paragraph 5). If the Minister of Environment receives an application, he/she shall notify the head of the relevant agency of the application, and if the head of the relevant agency fails to reply to the Minister of Environment as to whether he or she is in charge of the matter and whether the business entity needs approval, etc., within 30 days from the date when he or she receives notification from the Minister of Environment, obtaining approval from the head of the relevant agency will be deemed to be unnecessary (Paragraph 3).
 

(2)

Simultaneous Processing System (Article 29)
 
If two or more permits, etc., are required for the relevant business, a business operator may apply for simultaneous processing of its permit applications (Paragraph 1), and the Minister of Environment and head of the relevant authority shall immediately commence reviews of the permit applications, unless there is a compelling reason not to do so (Paragraphs 2 and 3).
 

(3)

Regulatory Exception for Demonstration (Articles 30 through 32)

A business operator may apply for a regulatory exception for demonstration, which will exempt all or part of the relevant regulations from being applied in the following cases: (i) cases where there are no standards, specifications, requirements, etc., for the relevant new technology or service for circular economy under the applicable laws and regulations, (ii) cases where there are standards, specifications, requirements, etc., but it is inappropriate to apply them to new technology or service for circular economy, and (iii) cases where verification is required within a limited area, period, or size but where it is impossible to apply for permits, etc., due to other laws and regulations (Article 30, Paragraph 1 of the Act). In principle, a business operator must subscribe to liability insurance to compensate individuals for personal or property damage that may occur due to the business being subject to regulatory exceptions prior to the commencement of the business (Article 30, Paragraph 2 of the Act).
 
Meanwhile, the effective period of a regulatory exception will be determined within a scope of up to two years and may be extended once (Article 32, Paragraph 1 of the Act). Even when a regulatory exception has been granted, if the laws and regulations applicable to new technologies and services for the circular economy system are amended, then a separate permission must be obtained without delay pursuant to the amended laws and regulations (Article 32, Paragraph 8 of the Act). In this regard, the position of the Ministry of Environment (the “MOE”) is that it will provide substantiated project costs and liability insurance premiums as well as consultation and performance management in order to facilitate the implementation of substantiation projects.
 

(4)

Temporary Permit System (Article 33)

A business operator may apply for a temporary permit if (i) there are no standards, specifications, requirements, etc., for the relevant new technology or service for circular economy under the applicable laws and regulations, or (ii) it is inappropriate to apply existing standards, specifications, requirements, etc. (Paragraph 1). The matters concerning liability insurance and the term of validity are the same as the regulatory exceptions for substantiation described above (Paragraphs 2 and 9), and if the applicable laws and regulations are not amended within the term of validity of the extended temporary permit, the term of validity will be deemed to have been extended until such amendment is completed (Paragraph 13).