Press Release

Board View

The Ministry of Environment assists companies in meeting their ESG goals

▷ The Ministry of Environment provides companies with direct financial support and a loan, a total worth KRW 3.8 trillion, to establish eco-friendly facilities, along with advisory services


Sejong, January 27 - The Ministry of Environment (Minister Han Wha Jin) plans to provide direct financial support of KRW 106.7 billion and a loan of KRW 3.7 trillion to assist Korean companies with their environmental, social, and governance (ESG) performance. Through direct financial support, the Ministry of Environment will provide 'ESG consulting' to help domestic manufacturing companies improve their ESG performance. Direct financial support will also be available for the construction project of smart ecological factories, which provides funds needed to change environmental facilities, and demonstration new green technologies for win-win cooperation. On the other hand, loans for investment in eco-friendly facilities, boosting green finance, and fostering future environment industry will be available. The loan is to support financially small- and medium-sized companies, business entities eligible for allocation permits, and businesses participating in the GHG target management system. 


This year, the budgets for direct support and loan increased by KRW 43.8 billion (70%) and KRW 60 billion (37%), respectively, compared to last year. The budgets increased considerably, particularly for the construction project of smart ecological factories and investment in eco-friendly facilities. 


Classification	Project	De ion	Notes  Direct Financial Support	ESG consulting service  (KRW 2.25 billion in 2023)	· Small- and medium-sized companies in significant supply chains with high export intensity  · Diagnosis of the ESG management, emission assessment, consulting for setting an emission target, etc.		Same amount as 2022  	Smart eco-factory  (KRW 90.9 billion in 2023)		· Small- and medium-sized companies (Maximum KRW 1 billion for a company, 60% for small-sized companies, and 50% for medium-sized companies)  ·Comprehensive support for environmental improvement, including greenhouse gas reduction	A KRW 30.3 billion increase from 2022  	Programs for win-win cooperation  (KRW 13.5 billion in 2023)		· Any company can apply (Maximum KRW 1 billion for a company, 70% for small-sized companies)  · If an innovative new green technology is applied for the environmental improvement of a demanding company, the Ministry of Environment will cover the cost of the company supplying the technology	New project  Loan	Loan for investment in eco-friendly facilities  (KRW 100 billion in 2023)		· Small- and medium-sized companies (Minimum KRW 10 million-Maximum KRW 10 billion)  · Support for installation and operation cost of greenhouse gas reduction facilities	A KRW 50 billion increase from 2022  	Loan for green finance  (KRW 24.3 billion in 2023)  * Loan volume of KRW 3.5 trillion		· Business entities eligible for allocation permits and businesses participating in the GHG target management system (The amount varies depending on the bank)  · Cost incurred during the process of reducing greenhouse gas and cost for operating plants and other facilities	A KRW 10 billion increase from 2022  	Loan for fostering future environment industry  (KRW 100 billion in 2023)		· Small- and medium-sized companies (Minimum KRW 10 million-Maximum KRW 10 billion)  · Funds for companies' green transition, including eco-friendly green facilities, etc.	Same amount as 2022


First, the 'ESG consulting service' provides advice on the environmental portion of ESG for small- and medium-sized Korean companies. The Ministry of Environment will provide the service to around 100 companies. The ministry decided first to support companies with high export intensity or are included in a major supply chain so they can meet the ESG needs of their clients. In particular, the ESG consulting service often recommends replacing facilities with more eco-friendly ones for companies to meet the goal of the environmental portion of ESG. The ministry will connect those companies that benefit from the 'ESG consulting service' with the program of direct financial support. This year, companies applying for the construction of smart eco-factory will receive extra points.


The project for constructing a smart eco-factory includes comprehensive support to improve old facilities into low-carbon and eco-friendly ones. Through greenhouse gas reduction, pollutants reduction, resource circulation improvement, and IoT introduction, the ministry will help construct eco-friendly factories. The Ministry of Environment set a budget of KRW 90.9 billion in 2023, the largest-ever amount, for building a smart eco-factory. The ministry will provide up to KRW 1 billion per company for 90 companies seeking a green transition at their companies.

 

Demonstrating new green technologies for win-win cooperation is an extended and improved version of the existing 'environmental facility commercialization.' The program connects companies with innovative new green technologies with companies needing such technologies and provides funds to cover demonstration costs. The ministry set a budget of KRW 13.5 billion to support 13 companies. Until 2022, the ministry supported only when small and medium-sized companies demonstrated environmental technology to other SMEs. The Ministry of Environment expands its support when SMEs demonstrate their environmental technology for larger companies or business establishment subject to an integrated environmental permit. Applications for direct financial support for 2023 can be submitted from January 19 to February 28. The project announcement, the project guide, and other information are available on the websites of the Ministry of Environment (me.go.kr) and the Korea Environmental Industry & Technology Institute (keiti.re.kr).


The investment in eco-friendly facilities is a loan to allow small- and medium-sized companies to borrow long-term and low-interest loans (KRW 100 billion in total) for installing and operating facilities needed for greenhouse gas reduction. The ministry will post the loan announcement on January 19 and receive applications throughout the year, beginning on February 20. If the upper limit of the loan is reached early, applications will no longer be accepted.


The loan for boosting green policy finance provides 'interest subsidies (paying off loan interests)' by applying a preferential interest rate, with the costs borne in halves by the government and a bank. The project enables companies that emit high volumes of greenhouse gases to borrow low-interest loans needed to improve the process and install facilities for greenhouse gas reduction. A budget of KRW 24.25 billion has been set to provide a total of KRW 3.5 trillion in loans. Any company that wishes to apply for a loan from this project can contact Korea Development Bank or Shinhan Bank. The Ministry of Environment is planning to have more banks participate in this project, and banks that wish to participate can apply throughout the year, beginning on January 19. A loan application schedule and other information will be posted by participating banks and managed at branches of participating banks.


Lastly, the loan for fostering future environment industry provides long-term and low-interest loans (KRW 100 billion in total) to help small- and medium-sized companies with their green transition. The Ministry of Environment will post the loan announcement on January 19, and the first application period will be seven days from February 2. As there is no upper limit of the loan per month, all loans can be taken out early. The project announcement, the project guide, and other information are available on the websites of the Ministry of Environment (me.go.kr), the Korea Environmental Industry & Technology Institute (keiti.re.kr), and the Environmental Policy Loan (loan.keiti.re.kr).


Jang Gi-bok, Director-General of the Green Transition Policy Bureau of the Ministry of Environment, said, "As the importance of ESG is growing globally in the industry, ESG has a connection with the EU's Carbon Border Adjustment Mechanism (CBAM). Accordingly, ESG will have a greater influence on Korean companies." He added, "The Ministry of Environment will provide full support for ESG in the environmental sector."



Contact: Jang Hwa-young, Deputy Director

Green Industry Innovation Division / +82-(0)44-201-6708


Foreign Media Contact: Chun Minjo(Rachel)

+82-(0)44-201-6055 / rachelmchun@korea.kr