Carbon-emission plan for vehicles postponedThe government yesterday decided to postpone instating its low-carbon vehicle cooperative fund system until the end of 2020, although it will start a carbon-emission trading system next year as it originally planned.
At the 30th economic ministerial meeting, chaired by Finance Minister and Deputy Prime Minister for the Economy Choi Kyung-hwan, the government made its decision on the two environmental regulations aimed at reducing greenhouse gas emissions.
“We decided that if both the low-carbon vehicle cooperative fund and carbon-emission trading system starts next year, pressure on the industry and the impact on the market would be too excessive,” the Ministry of Strategy and Finance said in a release.
The low-carbon vehicle cooperative fund system gives subsidies on cars with low CO2 emission and levies a tax on cars with high CO2 emissions. The carbon-emission trading system sets a quantitative limit on CO2 emissions for companies and allows them to trade insufficient or surplus amounts of CO2 emissions with each other.
Local companies have expressed their concerns that these regulations will weaken their competitiveness in already difficult economic times. The Ministry of Environment and Ministry of Trade, Industry and Energy have been trying to find common ground on the new systems.
The low-carbon vehicle cooperative fund was postponed because the government said it was not convinced that the regulation would be effective. In January, the government told the Korea Institute of Public Finance, the Korea Institute for Industrial Economics and Trade and the Korea Environment Institute to research the issue.
Their results showed that the system does not reduce carbon emissions. If the system is implemented, setting a maximum levy at 4 million won ($3,926) and a maximum subsidy at 10 million, the research found that 548,000 tons of CO2 will be reduced from 2015 to 2020, which is only 35 percent of the government’s plan to reduce emissions by 1.6 million tons. The research also showed that car sales would go down.
Although the regulation has been delayed, the government said it will still increase its subsidies on environmentally-friendly cars and extend the tax-break period to continue efforts to reduce carbon emissions.
The government also announced that it will tighten greenhouse gas emission and gas mileage standards for local automakers by 2020, as other countries have done. Under its plan, automakers have to meet average greenhouse gas emissions of between 140 grams per kilometer to 97 grams per kilometer on their entire fleet by 2020.
The carbon-emission trading system will go on as scheduled, but considering the pressure on industries, the government decided to lower emission reduction standards of all companies by 10 percent.
The government will give a carbon-emission level discount to companies that generate power and related industries. A fine of 10,000 won per ton will be imposed for over-emitting.
Local businesses, especially automakers, welcomed the government’s decision.
“It’s a good decision for the industry, but we will continuously work hard to meet the regulations set by the government in the given time and make our best effort to release environmentally-friendly cars,” said a spokesman from a local automaker.
However, critics claim that the government has discarded its responsibility to ensure a cleaner environment and was persuaded by the automakers’ lobby again. When the low-carbon vehicle cooperative fund was originally brought up in August 2012, it was scheduled to be implemented in July 2013 but was delayed to 2015.
Four Democratic United Party (DUP) lawmakers on the National Assembly’s Environment and Labor Committee yesterday held a press conference to condemn the government’s decision.
“This was a system that the government, opposition and ruling party, and companies agreed to start, but the Park Geun-hye administration is breaking the promise,” the DUP lawmakers said. “Because of the Park Geun-hye administration, the regulation is now on its way to being abolished.”
BY JOO KYUNG-DON [email@example.com]
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