On June 25, 2024, a National Assembly member Park Ji-hye introduced a bill titled “Special Measures Act on Promoting and Enhancing Competitiveness of the Carbon-Neutral Industries” (hereinafter referred to as the “Bill”) to strengthen support for carbon-neutral industries.

The Bill aims to respond to the increasing protectionist sentiment stemming from the global climate crisis, as represented by the US Inflation Reduction Act (“IRA”) and the EU’s Net Zero Industry Act (“NZIA”). Specifically, the Bill seeks to enhance domestic support for carbon-neutral industries such as electric vehicles, renewable energy, and green products, thereby promoting domestic investment, securing competitiveness, efficiently addressing the climate crisis, and fostering the development of industries related to carbon neutrality. Below is a key summary of the Bill.
 

• Definition of “Carbon-Neutral Industry”: The term “carbon-neutral industry” refers to a green industry within the meaning of the Framework Act on Carbon Neutrality and Green Growth for Coping with Climate Crisis that produces or provides related services for (i) electric vehicles as defined by the Act on Promotion of Development and Distribution of Environment-friendly Motor Vehicles, (ii) renewable electricity and facilities as defined by the Act on the Promotion of the Development, Use and Diffusion of New and Renewable Energy, and (iii) zero-carbon hydrogen produced solely using renewable energy and its production facilities as defined by the Hydrogen Economy Promotion and Hydrogen Safety Management Act (Article 2, Subparagraph 1 of the Bill).

• Designation of “Specialized Complex for Carbon-Neutral Industry”: The Minister of Trade, Industry and Energy, after deliberation and resolution by the Carbon-Neutral Industry Committee (a committee established within the Ministry of Trade, Industry and Energy under Article 8 of the Bill to deliberate and decide on matters related to the carbon-neutral industry), may designate certain areas as a “Specialized Complex for Carbon-Neutral Industry.” The “Specialized Complex for Carbon-Neutral Industry” refers to a designated area (i) where businesses in the carbon-neutral space and their supporting facilities form a cluster (or plan to join the cluster), or (ii) which is home to companies promoting projects related to investment or technological development in carbon-neutral industries or where such companies wish to relocate to or invest in (Article 9 of the Bill). If designated as a “Specialized Complex for Carbon-Neutral Industry,” companies in the complex are subject to special favorable treatment such as (a) expedited processing of licensing/permits and administrative requests, and (b) partial financial support for the operation of the specialized complex from the national and/or local governments (Articles 12 to 14 of the Bill).

• National Carbon-Neutral Technology Development Project: The government may pursue the “National Carbon-Neutral Technology Development Project,” which includes research and development projects in carbon-neutral technologies. Additionally, the government shall endeavor to prioritize the allocation of budgets for the “National Carbon-Neutral Technology Development Project” when planning budgets for national R&D projects (Article 15 of the Bill).

• Exemption from Preliminary Feasibility Study: The government, following relevant procedures, may prioritize selecting projects such as a support project for the “Specialized Complex for Carbon-Neutral Industry” and the “National Carbon-Neutral Technology Development Project” as projects subject to a preliminary feasibility study. Furthermore, for projects that require expedited execution, the government may exempt the preliminary feasibility study requirement (Article 16 of the Bill).

• Application for Regulatory Improvement: Companies related to the carbon-neutral industry can apply to the government for regulatory improvement/reforms necessary to undertake business activities in the field. The head of the relevant agency shall actively handle applications that do not require legislative change/approval. If a legislative change is required as a result of deliberation by the Carbon-Neutral Industry Committee, the head of the relevant agency shall promptly proceed with the necessary legislative procedures unless there are special reasons to the contrary (Article 19 of the Bill).
   

[Korean Version]