From January 26, 2023 to February 2, 2023, the Ministry of Environment (the “MOE”) progressively announced the “Annual Work Plan for 2023” (the “Work Plan”), which encompasses various areas, including: (i) Environmental Health and Chemical Safety, (ii) Resource Circulation, (iii) Climate Change and Clean Air, (iv) Nature Conservation, and (v) Water Management.

The Annual Work Plan sets forth detailed policy directions and tasks as an extension of the broader initiatives that were announced earlier this year in the “Key Policy Tasks 2023.”  The following details the key highlights of the Work Plan.

1.   Environmental, Health and Chemical Safety
 

(1)   Strengthen safety management of chemical products

The MOE plans to expand the scope of common household chemical products (i.e., finishing materials for arts and crafts and paint supplements) and enhance its control over those products currently subject to safety verification (i.e., special purpose coatings, adhesives, and removers).  As the relevant regulations were under grace periods, the MOE has not yet enforced regulations for active substances and biocidal products for certain purposes.  However, as the grace periods recently expired, the MOE now plans to provide more guidance and engage in closer inspection for unapproved active substances and biocidal products.  Furthermore, to eradicate the distribution of illegal common household chemical products, the MOE plans to expand safety investigations and online surveillance of common household chemical products subject to safety verification.  Therefore, companies are advised to check whether their products are in compliance with regulations pertaining to chemical products.
 

(2)   Encourage reducing the use of hazardous chemicals

A “Comprehensive Plan for Green Chemistry” will be established to reduce the use of hazardous chemicals throughout their entire life cycle (which includes the period prior to their manufacturing).  Moreover, the MOE will prepare a mid-to-long-term roadmap for developing alternative substances and low-toxicity processes.  The MOE also plans to promote a regulatory reform to reduce hazardous chemicals.  Furthermore, the MOE aims to encourage an amendment to the Act on Registration and Evaluation of Chemical Substances (the “K-REACH”) and the Chemical Substances Control Act by August, 2023 to reduce and better control toxic chemicals.
 

(3)   Prevent chemical accidents and bolster response systems

The MOE will inspect workplaces that are identified as being at risk of chemical accidents and will review whether a management plan for chemical accident prevention has been implemented.  To prevent chemical accidents at small and medium-sized companies, the MOE plans to expand its support services by, for example, expanding the scope of government-funded projects for improvement of worn-out facilities as well as providing technical consulting for safety management of facilities handling hazardous chemicals.
 

2.   Resource Circulation
 

(1)   Prepare for implementation of the Act on the Promotion of Transition to a Circular Economy and Society

The MOE plans to solidify the regulatory basis for transitioning to a resource-circulation economy based on the Act on Promotion of Transition to a Circular Economy and Society, which was enacted last December by entirely amending the Framework Act on Resources Circulation that will come into effect on January 1, 2024.  In order to achieve this, the MOE will promote a plan to designate as “circular resources” certain types of materials that were verified to be recycle-friendly and safe, such as waste paper and scrap metal.  Additionally, to ensure a sustainable use of products, the MOE plans to set standards for the durability and reparability of products, the securing of spare parts and delivery deadlines in consultation with relevant stakeholders within 2023.
 

(2)   Promote high-value-added recycling

The MOE will encourage changes in traditional recycling methods that use fuel or incineration heat.  To this end, the MOE will support the development of raw material/fueling technologies for waste plastics and raise the unit price of recycling subsidies for material and chemical recycling.  Furthermore, the MOE will expand publicly-owned pyrolysis plants and reorganize the system to allow plastic products using pyrolysis oil to be exempted from waste charges.  At the same time, the MOE plans to require plastic manufacturers to use recycled raw materials for at least 30% of their production by 2030.
 

3.   Climate Change and Clean Air
 

(1)   Reduce greenhouse gas

On March 21, 2023, the MOE released a draft national plan for carbon neutrality and green growth that includes the detailed implementation plan (roadmap) of the 2030 National Greenhouse Gas Reduction Target (also known as “2030 NDC target”).  Based on this, the MOE plans to establish the Fourth Basic Plan for the Emissions Trading Scheme by the end of 2023, which is one year ahead of the statutory deadline.  In addition, to prevent potential damages to Korean companies caused by the European Union’s Carbon Border Adjustment System (“CBAM”), the MOE will organize a dedicated task force, prepare guidelines, and provide consulting services for companies to help them comply with their obligations under the CBAM.

Furthermore, a larger scope of targets will be subject to the “climate change impact assessment,” which was introduced to prevent damages arising from the climate crisis.  Under the current climate change impact assessment system, the following are subject to the assessment: (i) energy, (ii) urban areas, (iii) industrial complexes, (iv) ports, (v) water resources, (vi) mountainous districts, and (vii) river development.  However, starting from September 25, 2023, the following areas will also be subject to the assessment: (i) roads, (ii) airports, and (iii) development of treatment facilities for waste and livestock excreta.
 

(2)   Foster green industry and prevent greenwashing

To support the Korean Green Taxonomy Guideline (“K-Taxonomy”), the MOE will subsidize companies with interest expenses for issuing green bonds, and operate educational programs.  Moreover, in line with the increasing demand for ESG both in Korea and abroad, the MOE will reclassify industries subject to environmental data disclosure by reflecting international standards.  The MOE will integrate them with related disclosure systems such as the National Greenhouse Gas Management System (“NGMS”), the Stack Emission Management System (“SEMS”) and the Integrated Chemical Information System (“ICIS”) to ease the burden on companies for data entry.  At the same time, the MOE plans to reform the eco-label certification system and prepare guidelines for the promotion of eco-friendly management to prevent greenwashing, while amending the Environmental Technology and Industry Support Act to establish penalty provisions for environmental labeling and advertising violations.
 

(3)   Promote conversion to zero-emission vehicles

To accelerate the transition to zero-emission vehicles, the MOE plans to expand subsidies, increase the number of electric chargers (especially focusing on living areas), and install hydrogen charging stations in a balanced manner nationwide to create a convenient charging environment.  In addition, the MOE will increase public institutions’ target rate of conversion to zero-emission vehicles to 100%, encourage private companies to participate in the Korean Zero-Emission Vehicle 100 (the “K-EV100”), and increase the target supply of zero-emission vehicles to promote conversion to zero emissions from both the demand and supply sides.  At the same time, in order to reduce internal combustion vehicles, the MOE plans on expanding the scope of early scrapping support to include Level 4 vehicles and strengthening the average greenhouse gas standards for small cars.
 

4.   Nature Conservation and Water Management
 

(1)   Improve the Environmental Impact Assessment System

The MOE will introduce an assessment system, under which different sets of standards will be applied depending on the size of development projects.  For example, the MOE aims to require an in-depth assessment for projects with a greater environmental impact, as opposed to a simplified assessment for projects with a smaller impact.  On the other hand, to prevent the problem of poor assessment reports prepared by low-cost outsourcing services, the MOE plans to establish certain standards for outsourcing costs and closely review assessment reports that are less than 80% of the established standard.  In addition, the MOE will strive to enhance the credibility of environmental impact assessments by introducing an online opinion gathering system to expand local residents’ participation and by selecting businesses (considering the time period and industry type) to be subject to priority management for joint site inspections with experts to strengthen follow-up management.
 

(2)   Achieve carbon neutrality by using water resources

The MOE plans to pursue projects that use organic waste resources (i.e., food waste, sewage waste, livestock excreta, etc.) to produce energy sources such as biogas and actively expand floating solar power projects in dams.  In addition, the MOE will actively support the ultrapure water industry, which is essential to major industries, and provide full support for water industry exports through seawater desalination vessel technologies and plant technologies.
 

The MOE’s Work Plan outlines the Ministry’s policy directions for various environmental issues that it believes are imminent and should be prioritized.  The Work Plan also provides the intended time framework for the implementation of the new policies to achieve the MOE’s goals.  We advise companies doing business in Korea to review the Work Plan closely and continue to pay attention to the progress of MOE’s initiatives for this year.

[Korean Version]