Carbon Capture, Utilization and Storage (“CCUS”) technology, which collects CO₂ generated from industrial facilities, etc., and either stores it in the ocean/land or uses it as a high-value added substance, has gained increasing attention as a major tool for carbon neutrality and CO₂ reduction. However, due to the lack of legal foundation to carry out CCUS projects, there has been a continuous demand for specific legislation. In response, a bill on “Carbon Dioxide Capture, Transportation, Storage, and Utilization” (the “Proposed Bill”) was proposed in February, 2023.

1.   Regulations on Permits Related to Carbon Capture, Transportation, and Storage
 

The Proposed Bill sets out various requirements for CCUS projects. With respect to the installation and operation of CO₂ collection facilities, the installation plan shall be reported to the Minister of Trade, Industry and Energy (Article 7). In order to conduct a CO₂ transportation business, a business shall secure appropriate facilities and documents, which must be approved by the Minister of Trade, Industry and Energy (Article 8). In addition, with respect to the installation of pipelines for transporting CO₂, the Proposed Bill prescribes, among other things, a requirement to obtain approval for safety management regulations (Article 9), a requirement to report the appointment of safety managers (Article 10), and a requirement to conduct safety inspections (Article 11).
 

2.   Regulations on Carbon Storage
 

The Proposed Bill stipulates that exploration for finding appropriate CO₂ repositories shall be subject to the government’s approval (Article 13, Paragraph 1), and that the specific approval criteria shall be specified by the Presidential Decree (Article 13, Paragraph 3). The Proposed Bill also stipulates that in cases where it is impracticable to submit exploration records within three years from the date of approval for exploration, the deadline for submission of records may be extended once by up to three years (Article 13, Paragraph 6). 

Moreover, any person who intends to operate a CO₂ storage business must obtain a license from the government (Article 18, Paragraph 1), and such a person must meet the requirements for safety management, financial and technical capabilities, etc. Also, the Proposed Bill states that detailed licensing standards shall be prescribed by the Presidential Decree (Article 18, Paragraph 3).
 

3.   Government Support for CCUS Projects
 

In an effort to support the CCUS industry, the Proposed Bill includes the following provisions on (i) the designation of integrated complex for CCUS (Article 30), (ii) the incentives in connection with greenhouse gas emission permits when utilizing CO₂ for R&D and demonstration purposes (Article 34), (iii) the certification of technology and products for utilizing collected CO₂ (Article 35), (iv) the confirmation of and support for companies specializing in CO₂ utilization (Article 36), (v) the support for CCUS-related R&D (Article 37), and (vi) subsidies/loans for R&D (Article 40).
 

The Proposed Bill is currently pending at the Trade, Industry, Energy SMEs and Startups Committee. It is expected that the Proposed Bill will be reviewed, and that the National Assembly approval process will be carried out within this year; also, each relevant ministry is expected to prepare a draft of the Proposed Bill’s subordinate statutes. The Proposed Bill provides the basis for major regulations as well as support for CCUS projects. Furthermore, as their specific details will be prescribed under subordinate statutes (such as presidential decrees and joint ordinances of relevant ministries), it is advisable to closely monitor the enactment process of the Proposed Bill and subordinate statutes.

The Korean text of the Proposed Bill can be found here (Link). 

[Korean Version]