The Ministry of Environment (Minister Han Wha-jin) will present a 'Chemical Substance Management and Environmental Killer Regulation Reform Plan' at the 'Regulatory Innovation Strategy Meeting for Killer Regulation Reform' scheduled for the morning of August 24. The reform plan contains measures that induce economic effects of over KRW 8.8 trillion by 2030. 

* The expected economic effects by 2030 based on the Environmental Killer Regulation Reform Plan, including improvement effects on chemical substance regulations (KRW 0.3 trillion) and improvement effects on regulations on advanced industries such as semiconductors (industry estimate of KRW 8.5 trillion)

This Environmental Killer Regulation Reform Plan includes the completion of structural reform of chemical substance regulations through the revision of the 'Act on Registration and Evaluation of Chemical Substances' (hereinafter referred to as the 'Chemical Evaluation Act') and the 'Chemical Substances Control Act' (hereinafter referred to as the 'Chemical Control Act') within the year, as well as customized (pin-point) regulatory innovation for advanced industries. The reform plan can be divided into major categories: 'bulk regulation innovation,' including chemical substance regulations and environmental impact assessment, and 'customized regulation innovation,' including support for advanced industries and acceleration of carbon neutrality. 

< ① Bulk Regulation Innovation: Completion of Structural Reform + Overcoming Current Practices >

The Ministry of Environment plans to complete the revision of key laws such as the 'Chemical Evaluation Act,' 'Chemical Control Act,' and 'Environmental Impact Assessment Act' in the latter half of this year, achieving the structural reform of environmental regulations including chemical substance regulations and environmental impact assessment. Simultaneously, it will actively improve previously lukewarm field practices to generate regulatory innovation outcomes.

First, by enhancing chemical substance regulations to reduce companies' registration costs for chemicals and generating economic effects of over KRW 300 billion by 2030, the differential management of chemicals based on their risks will increase regulatory effectiveness and strengthen national safety. 

The stricter registration criteria for new chemical substances (annual volume of 0.1 tons or more) than international standards will be aligned with the levels of advanced chemical management countries such as those in the European Union (EU) (annual volume of 1 ton or more). Through this, it is anticipated that around 700 companies, mainly in advanced industries such as semiconductors and electronics, will achieve a total economic effect of KRW 200 billion by 2030 through cost savings from registration and early product releases.

Furthermore, the standardized chemical substance regulation that was applied to facilities with low accident risks (around 330 handling facility criteria) will transition to a risk-proportional regulation, where regulations are applied differentially based on the level of risk. Through this, small and medium-sized enterprises with low handling volumes will be eligible for exemptions from or eased regulations such as handling facility criteria and regular inspections. Alongside this, principles for managing chemicals that lacked harmfulness information and were previously in regulatory blind spots will be established, ensuring national safety as well. The revision of the 'Chemical Evaluation Act' and the 'Chemical Control Act' containing such structural reforms in chemical substance regulationsis scheduled to be completed within this year.

In addition, measures to significantly reduce companies' chemical substance registration costs are also being pursued by simplifying the requirements for submitting test data, thereby omitting certain submissions. Under the 'Chemical Evaluation Act,' approximately 16,000 companies are required to complete registration of existing chemical substances by 2030. When exempted from submitting required test data for registration, the government will improve the process to directly verify information by accepting the source of publicly available assessment data from overseas. Through this, relevant companies will be able to save up to KRW 100 billion in costs by 2030.

Second, environmental impact assessments will be improved through structural reform and practice enhancement, enhancing environmental impact review and disaster response, reducing corporate burdens, and boosting vitality in the private sector and local communities.

To enhance the efficiency of environmental impact assessments, different assessment procedures will be implemented based on the scale of the project and other factors. In cases with low environmental impact, a simplified assessment process will be introduced, exempting the need for evaluation discussions. In addition, for small-scale environmental impact assessments, local governments will be allowed to conduct assessments through local ordinances, thereby delegating assessment authority for small-scale development projects to the local level. Furthermore, urgent disaster response projects will be exempted from environmental impact assessments, and river improvement projects included in the basic river plans after strategic assessments will also be exempted from environmental impact assessments. Through this, improvements will ensure that disaster response projects can be expedited without delays.

In addition, a new procedure for raising objections and making adjustments to excessive requirements or discussion outcomes will be established, allowing for sufficient consideration of the opinions of business operators. Moreover, special provisions*such as exemption from strategic assessments, previously applicable only to government financial projects, will also be extended to private investment projects. Through this, it is expected that the burden of environmental impact assessments will be reduced, leading to increased activation of private and local investments. 

* If the sewerage project is included in another plan and goes through strategic environmental assessment discussions, the project will be exempt from a separate strategic environmental assessment.

< ② Customized Regulatory Innovation: Support for Advanced Industries + Transition to Carbon Neutrality >

To address the critical aspects of national economy and security, tailored regulatory improvements are being pursued for advanced industries and the transition to carbon neutrality, enhancing the perceptible impact of regulatory innovation.

Firstly, swift improvements to environmental regulations for advanced industries will be implemented, and proactive support will be provided for the establishment of advanced industrial clusters such as the Yongin Semiconductor Cluster. 

Environmental regulations related to advanced industries such as semiconductors and displays will be swiftly improved. Specialized facility criteria for displays will be established, with an industry-estimated annual economic effect of KRW 1.1 trillion expected. Emission standards for fluorine in the semiconductor and display industries will also be rationalized, with an industry-estimated annual cost reduction of up to KRW 125 billion expected. Furthermore, regulatory improvements will continue, including allowing inter-company reuse to expand the reuse of industrial wastewater. 

The Ministry of Environment operates dedicated support teams within the organization to proactively assist in the establishment of advanced industrial clusters. In particular, proactive measures for water supply solutions needed for advanced industrial clusters such as the Yongin Semiconductor Cluster will be established. Support for investment in advanced industrial clusters will be facilitated through measures such as operating the Environmental Impact Assessment Fast-Track system.

Secondly, concentrated efforts will be made to improve regulations that hinder investments in carbon neutrality and the circular economy. 

The greenhouse gas emission allowance transfer restriction regulations will be relaxed, and the participation scope in the emission allowance market will be expanded. Support for greenhouse gas reduction facilities will also be extended in terms of eligibility and scope to facilitate the transition to carbon neutrality. Furthermore, improvements will be made to battery storage standards, and a circular resource designation decree will be implemented to relax waste regulations, aiming to secure domestic supply chains for essential resources such as rare or valuable metals. Efforts will also be made to promote the recognition and designation of used clothing as circular resources, fostering environmentally friendly businesses based on resale and accelerating the implementation of circular economy practices across various industries.

Meanwhile, the economic effects of the environmental regulation improvements pursued since the new government took office are projected to surpass approximately KRW 25 trillion* by 2030. 

* The projected figures include the economic effects of measures such as the establishment of semiconductor specialized facility criteria (December 2022) with cumulative effects of KRW 16.8 trillion and the anticipated effects from the current regulatory improvement measures with cumulative effects of KRW 8.8 trillion. 

Minister Han Wha-jin stated, "While firmly adhering to the goal of environmental policies that protect the safety and health of the people, we will pursue environmental regulatory innovation that enhances practical application at the field level." She further emphasized, "Taking this Regulatory Innovation Strategy Meeting as an opportunity, we will strengthen the momentum for regulatory innovation, creating perceptible impacts that boost vitality in the private sector, including private investments, as well as in local communities and the economy."

Contact: Kim Soo-Hyeon, Deputy Director

Legal Affairs and Regulations Reform Division / +82-(0)44-201-6395