Nuclear energy will help fight inflation, trade minister says

Economy

Published: 06 Jul. 2022, 15:44

Nuclear energy will help fight inflation, trade minister says

Minister of Trade, Industry and Energy Lee Chang-yang answers questions by reporters on Tuesday in Sejong. [MINITRY OF TRADE, INDUSTRY AND ENERGY]

Trade, Industry and Energy Minister Lee Chang-yang said the government will focus on increasing the competitiveness of Korean exports while maximizing the use of nuclear energy in overcoming the current crisis.

Late Tuesday, Lee told reporters that the ongoing crisis is mainly external and driven primarily by global inflation and an energy shock.

"We have two courses we need to take," Lee said. "One is to raise export competitiveness as much as we can and the other is to maximize nuclear energy, a key energy source, to absorb the energy shock."

"The most important point of the new government's energy policy that was recently announced is strengthening nuclear power and energy security while pursuing energy consumption efficiency," Lee said.

"As we are highly dependent on energy imports, we are directly affected by the two — rising inflation and rising energy prices," Lee said.

"We will continue to be exposed to the energy shock unless we change the system of high consumption and low efficiency," he added.

He said during Tuesday's cabinet meeting there have been discussions of turning Seoul into a smart city.

"This year, New York passed a building code that improves energy efficiency," Lee said

The government on Tuesday announced an energy plan in which the nuclear energy ratio in the nation's energy mix will be raised to 30 percent by 2030.

Under the Moon Jae-in government, which championed on phasing out nuclear energy, nuclear energy would have been reduced to 24 percent.

Last year, the nuclear energy ratio was 27.4 percent.

The minister said Korea received a good response from the Czech Republic and Poland recently regarding the building, maintenance and operation of nuclear power plants.

"There is a strong possibility of exporting our nuclear power plants, and if we continue, we may see good results," Lee said.

He said the government is currently looking at policies, including the expanding of tax credits for facility investment, which could contribute to improving productivity.

"The most important factor in preventing rising consumer prices is to raise productivity," Lee said. "Improved economic productivity will absorb the shock from rising consumer prices."

He stressed that it is essential to raise competitiveness in terms of leading technologies.

"Expanding tax benefits will boost investment in facilities and improving their productivity, and this will also generate jobs," Lee said. "In addition to tax benefits, we plan to also pursue regulatory reforms."

There has been growing concern that the country is entering stagflation as Statistics Korea on Tuesday announced June inflation at 6 percent, the highest in 24 years.

Lee also said the government will be announcing measures to boost the semiconductor industry later this month.

He said one of the key focuses of the measures will be strategies to improve industries that are closely connected with semiconductors, including the battery, display, artificial intelligence and robotics businesses.

"It could have an impact not only on semiconductors but also related industries," Lee said.

On global trade, Lee said while Korea has been increasing its cooperation with the United States, this does not mean that it was reducing ties with China.

"There is no color or ideology in markets," Lee said. "We consider a land one of opportunity if we can do business.

"There are various cooperation opportunities with China."

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]