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Passenger cars, especially large vehicles, in Korea usually emit a large amount of greenhouse gas. The government plans to offer financial support to owners of smaller cars emitting less CO2, while imposing penalties on buyers of heavy-polluting vehicles. / Korea Times file |
By Kim Se-jeong
No one disputes how much the automobile industry means for Korea. Automobile exports helped the country realize its "miraculous" growth, and still plays a key role in contributing to the economy.
As the country struggles to reduce greenhouse gas emissions in the face of climate change, people have high expectations that the auto industry will do more to help reduce CO2 emissions.
Song Sang-seok, secretary general of the Networks for Green Transport, an NGO based in Seoul, is among the few who want to make a difference.
He has been closely watching the development of a support program for low-carbon vehicles.
In early March, Minister for Trade, Industry and Energy Yoon Sang-jik said he would take a close look at the program that was to be launched early next year.
"We will make sure made-in-Korea cars won't be discriminated with the introduction of this regulation," Yoon said in response to outcries from the automobile industry which complained that the new regulation would hamper domestic car sales in Korea.
Businesses in the auto industry welcomed his remarks.
Now, the Ministry of Environment in charge of working out details of the scheme says it will be implemented as scheduled. And it remains optimistic that the new regulations will both address the concerns of carmakers and achieve tangible greenhouse gas reduction to mitigate climate change.
Song keeps his wary eyes, mindful that it could be all words, without anything done.
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What is the support program?
The goal of the scheme is simple: get consumers to buy more small cars that emit less greenhouse gas.
The plan is to offer a bonus to consumers of less-polluting cars while imposing penalties on heavy-polluting vehicle buyers. The amount of incentives and criteria are yet to be set.
All the passenger cars up to vans with 3.5 tons or less are obliged to comply with the regulation. Electric cars will be exempt from the support program, while hybrid vehicles will be included. The bonus will be available for the first purchase only.
Accumulated penalties will be transferred to bonuses, but the first year will begin with taxpayers' money. The environment ministry and the trade ministry are working together to decide how much is required for the initial year.
The program was born during the former President Lee Myung-bak administration, which succeeded in making low carbon and green growth a national and international agenda. The Act on Low Carbon and Green Growth took effect in 2010, mandating the introduction of the support program.
It missed the first deadline in July 2013. Giving the automobile industry a grace period was a reason given.
France had a similar scheme, and was successful. The Ministry of Environment says it is studying the French case. Records provided by the ministry show that the sale of environmentally-friendly vehicles rose by 30 percent between 2007 when it was launched and 2011.
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Regulating vehicles high on priority
Korea is the world's sixth-largest greenhouse gas emitters, following the United States, Russia, Japan, Germany and Canada. It owes much to the energy-intensive industries such as oil refining and steelmaking, but they are often exempt of environmental regulations because of their contributions to domestic economic growth.
In 2020, Korea is expected to emit 776 million tons of greenhouse gas. Former President Lee vowed to cut this amount by 30 percent. A reduction roadmap released in January this year indicated that the priority was on regulating the transportation sector, which was required to reduce 34.2 million tons of greenhouse gas, almost 34 percent decrease from usual levels.
And that's why the low-carbon car support program is well received.
"This area still has a lot of room for reduction. The program can be a real meaningful step for cutting the greenhouse gas emission, if it gets implemented as initially intended," Song said.
According to the Ministry of Land, Infrastructure and Transportation, small cars are a scarce commodity on the road in Korea. Small cars have an engine displacement of 1,000 cubic centimeters or less.
Out of 15 million registered passenger vehicles last year, only 16 percent were small in size. Almost 85 percent of consumers purchased big vehicles with engine displacement at 1,500 cc or more.
The Ministry of Environment echoes Song in part.
"This has really helped consumers change consumption patterns," said a ministry official.
The auto industry's opposition
Automakers want the support program to be cancelled. They argue the program will only destroy the nation's flagship industry.
Some say giving the automobile industry a favor will cause its own destruction because regulations for vehicles are only becoming stricter in the overseas market.
The European Union's new target will require vehicles sold in the EU to generate 95 grams of carbon dioxide per kilometer or less from 2020. The EU is an important market for Korean automobile companies. The existing limit is 130 g/km. The limit for Korea is 140 g/km.
The United States, another important market for Korean car manufacturers, will impose a regulation of 95 g/km from 2025.
"We are aware of tougher regulations in Europe, which is a big struggle for us. A new regulation by the Korean government will only make things worse," said an employee of a major automaker.
Made-in-Korea cars are sold around the world, but major revenues are earned from the domestic market. For example, 80 percent of Hyundai Motors Group vehicles are sold abroad, but 40 percent of its revenue comes from the domestic market by selling big polluting cars.
The environment ministry says details of the program are expected to be finalized next month.
However, Song said he is keeping his expectations low.
Hong Wuk-hee, a scholar and head of the Semin Environment Research Center in Daejeon, said it's not just about deadlines.
"The central government has done little until recently. Environmental issues are time-consuming. We need to learn from the developed countries which have set goals since 1980s for greenhouse gas reduction for vehicles, and follow up on them," he added.
