The Ministry of Environment (the “MOE”) has announced the proposed amendments to overhaul the Enforcement Decree and Enforcement Rules of the Act on the Promotion of Transition to a Circular Economy and Society (the “APTCES”).

This announcement follows the complete overhaul of the Framework Act on Resources Circulation into the APTCES that was conducted in order to support the efficient use of resources throughout products’ entire lifecycles (e.g., production, consumption, and distribution) and the transition to a sustainable circular economy and society (promulgated on December 31, 2022, for entry into force on January 1, 2024). The MOE has now established and announced the lower regulations for the APTCES that prescribe the matters delegated by the APTCES and matters necessary for their enforcement.

After collecting comments from various stakeholders during the comment period (from July 31, 2023 to September 11, 2023), the MOE will finalize the amendments to the Enforcement Decree and Enforcement Rules of the APTCES by December 2023. The amended Enforcement Decree and Enforcement Rules of the APTCES will become effective on January 1, 2024.
 

The APTCES defines the basic concepts related to a circular economy, such as “circular raw materials” and “circular use” (Article 2 of the APTCES), while delegating the further development of these concepts to the lower regulations.

The APTCES defines “circular raw materials” as substances that may be used in a circular manner as prescribed by the Presidential Decree that are (i) used in people’s daily lives or industrial activities or (ii) unused and collected in either their original state or after being processed in their entirety or partially (Article 2, Item 4 of the APTCES).

The proposed amendment to the Enforcement Decree of the APTCES stipulates that “raw materials for circular use as prescribed by the Presidential Decree” under Article 2, Item 4 of the APTCES refer to (i) circular raw materials, recycled raw materials, used products, recycled aggregates, recyclable resources, recycled resources, organic waste, by-products, and gaseous substances incidentally generated from industrial activities as defined under the APTCES and other laws and regulations and (ii) other substances designated and notified by the Minister of Environment (Article 2 of the proposed Enforcement Decree of the APTCES).

The APTCES also defines “circular use” as (i) any activities prescribed by the MOE Ordinance, such as reusing or recycling materials or articles used in people’s daily lives or industrial activities as resources (Article 2, Item 3, Sub-item (a) of the APTCES) or (ii) activities to recover energy or to make energy recoverable from waste pursuant to Article 2, Item 1 of the Energy Act (Article 2, Item 3, Sub-Item (b) of the APTCES).

The proposed amendment to the Enforcement Rules of the APTCES further substantiates the mentioned basic concepts by (i) adding remanufacturing, gas capturing/storing, and lending/sharing to the scope of activities that constituted “circular use” under the previous Framework Act on Resources (i,e., collecting/transporting, separating/selecting, crushing/compressing/cutting, and reusing) and (ii) stipulating that other activities designated and notified by the Minister of Environment may also be considered as “circular use” (Article 2 of the proposed Enforcement Rules of the APTCES).
 

The APTCES allows the Minister of Environment to conduct a “circular use assessment” of products that are considered difficult to use in a circular way. The APTCES delegates the detailed methods and procedures regarding the assessment to the lower regulations (Article 18 of the APTCES).

The proposed amendment to the Enforcement Decree of the APTCES stipulates that the timeframe to establish the circular use assessment plan is five years, which is longer than the three-year timeframe established for the assessment of harmfulness and circular use of products under the previous Framework Act on Resources Circulation (Articles 8 through 10 of the proposed Enforcement Decree of the APTCES). Further, the proposed amendment to the Enforcement Rules of the APTCES provides the standards for selecting products subject to the circular use assessment. Notably, the proposed amendment introduces additional standards on delivery/import volume or production/sales volume to the standards for selecting products subject to the circular use assessment under the previous Framework Act on Resources Circulation (Article 11 of the proposed Enforcement Rules of the APTCES).

The proposed amendments to the Enforcement Decree and the Enforcement Rules of the APTCES, which establish systems for promoting the use of circular resources and products certified for circular use, further specify provisions on (i) the procedures and methods to apply for the recognition of circular resources, (ii) procedures and methods for the Minister of Environment to designate and notify circular resources, (iii) requirements for the designated business operators using circular resources, and (iv) standards to designate agencies to be entrusted with certifying the “circular resource quality mark” as well as standards and procedures to obtain or revoke the “circular resource quality mark.”

Other noteworthy provisions include (i) provisions on the sub-categories of waste for which the procedures and methods to apply for recognition as a circular resource will be simplified and the specific procedures that will be omitted if recognized as such (Article 14 of the proposed Enforcement Decree of the APTCES) and (ii) provisions on products that can be directly labeled as products made with circular resources on their packaging or containers (i.e., “products that used quality certified circular resources amounting to 10% or more of the total weight of raw materials used”) and labeling guidelines (Article 19 and Annex 4 of the proposed Enforcement Rules of the APTCES).
 

The APTCES also sets forth provisions on the “regulatory sandbox” that provides special exceptions from regulations to new technologies and services that promote a circular economy. Accordingly, any business operators who intend to utilize a new technology or service to promote a circular economy may apply for (i) a prompt verification as to whether a license or permit will be issued under the applicable laws and regulations, (ii) the collective processing of multiple license and permit reviews, (iii) regulatory exceptions for demonstration purposes, and (iv) a permit to quickly launch a new technology or service for which safety verification has been completed (Articles 27 through 34 of the APTCES).

The proposed amendments to the Enforcement Decree and Enforcement Rules of the APTCES further specify the detailed provisions on (i) the composition and operation of the Deliberation Committee for New Technologies and Services for a Circular Economy (Articles 22 and 23 of the proposed Enforcement Decree of the APTCES), (ii) procedures and forms for applying for and notifying the results of prompt and collective processing to verify whether a license or permit is necessary for new technologies and services that promote a circular economy (Articles 24 and 25 of the proposed Enforcement Decree of the APTCES, and Articles 20 and 21 of the proposed Enforcement Rules of the APTCES), (iii) procedures and forms for applying for special exceptions and temporary permits (Articles 26 and 30 of the proposed Enforcement Decree of the APTCES, and Articles 22 and 26 of the proposed Enforcement Rules of the APTCES), and (iv) liability insurance for business operators that have applied for special exceptions and temporary permits (Article 27 of the proposed Enforcement Decree of the APTCES, and Article 23 of the proposed Enforcement Rules of the APTCES).
 

The APTCES has established an institutional foundation for the sustainable use of resources throughout the products’ entire lifecycle, from the designing and production stages to the consumption, distribution, and recycling stages, and has clearly defined the paradigm for achieving circular economy. As the Government considers transitioning to a circular economy and society as an important agenda, we expect more emphasis on the relevant policies in the future. Since the lower regulations of the APTCES will stipulate the detailed content, procedures, and methods for transitioning to a circular economy, companies doing business in Korea are advised to thoroughly review the legislative process and enactment of all lower regulations, including related public notices.

[Korean Version]