South Korea’s New Green Target Sparks Industry Concerns
On the 10th, the Presidential Committee on Carbon Neutrality and Green Growth, an advisory body to the president, made a significant decision by setting the national greenhouse gas reduction target (NDC) for 2035 at a minimum of 53% and a maximum of 61% compared to 2018 levels. Although a Cabinet meeting on the 11th is still required for deliberation and approval, the proposal is considered effectively finalized. This move has drawn immediate reactions from industry circles, who expressed concerns that the increased burden on businesses will require substantial support.
Industry Groups Raise Alarms Over New Targets
On the same day, 14 organizations—including six major economic groups such as the Korea Chamber of Commerce and Industry, Federation of Korean Industries, Korea Enterprises Federation, Korea International Trade Association, Korea Federation of SMEs, and Federation of Middle Market Enterprises of Korea—along with eight industry-specific associations issued a joint statement. These groups argued that amid urgent responses to global economic changes, such as U.S. tariff policies, and the insufficient commercialization of carbon reduction technologies in the industrial sector, raising the 2035 reduction target to 53–61% would impose a considerable burden on industries.
The industry associations represent sectors with high energy consumption, including steel, chemicals, petroleum, textiles, and automobiles, which are the backbone of South Korea’s manufacturing industry. These sectors are particularly concerned about the potential impact of the new targets on their operations and competitiveness.
Calls for Support Measures
Businesses have emphasized the need for support measures, especially regarding industrial electricity rate hikes, as environmental regulations increase cost pressures. The 14 organizations stated in their declaration, “Given significant concerns over potential electricity rate increases, rate hikes should be minimized, and any increases should be preannounced to allow sufficient preparation.” They added, “For sectors facing heavy greenhouse gas reduction burdens, tax and financial support, as well as the expansion of carbon-free energy infrastructure, must be swiftly implemented.”
Institutional Frameworks Need Reforms
To achieve the challenging NDC target, the industry groups called for the strengthening of institutional frameworks centered on incentives rather than regulations. They believe that enabling companies to continue bold investments in a predictable environment is crucial. This approach would help businesses adapt to the new requirements without compromising their growth or stability.
Key Points from the Industry Response
- Increased Burden on Businesses: The new targets are seen as a significant challenge for industries, particularly those with high energy consumption.
- Need for Support: There is a strong call for support measures, including restraint on electricity rate hikes and additional financial and tax incentives.
- Predictable Environment: Companies emphasize the importance of a stable and predictable regulatory environment to continue making long-term investments.
- Incentive-Based Frameworks: The industry advocates for a shift from strict regulations to incentive-based policies to encourage sustainable practices without hindering economic growth.