Major Developments in 2023
South Korea created the “Plan for Carbon-neutral Public Sector” after joining the Net Zero Government Initiative. The goal is to achieve net zero in government operations by 2050, meaning they will lead the shift to a carbon-neutral society. The Ministry of Environment, the leading government ministry for Korea’s carbon-neutral policies, led the establishment of the plan, in collaboration with various ministries including the Office for Government Policy Coordination, Ministry of Trade, Industry and Energy, Ministry of Land, Infrastructure and Transport, Ministry of the Interior and Safety, Ministry of Oceans and Fisheries, and Ministry of Education. The Plan has been finalised by the Presidential Commission on 2050 Carbon Neutrality and Green Growth in November 2023.
Being one of the top automakers in the world, South Korea has implemented the electric vehicle (EV) policy, also known as the eco-friendly vehicle policy, to reducegreenhouse gas emissions and fine particulate matter. Over 20 per cent of fossil fuels are used in South Korea’s transportation industry. South Korea has also introduced a renewable energy strategy, driven by its environmental goal to cut greenhouse gas emissions by 37%. South Korea is actively supporting the battery and manufacturing industries to increase the potential for exporting EVs to other markets. This is due to the country’s recognition of its home market and reputation for cutting-edge technologies. Therefore, the EV industry can benefit South Korea in two ways: first, by enhancing environmental quality and second, by generating economic benefits.
Transform to future vehicles
The future automobile policies of the government go beyond EVs to include services such as car sharing, networked cars, and autonomous driving. The government is focusing its policies to support future EVs and autonomous driving, and it is progressively extending to include connected cars and car sharing. These policies are based on the Future Vehicle Industry Development Strategy and the Autonomous Vehicle Policy Roadmap. The government is boosting the penetration of EVs and resolving the lack of infrastructure, while for autonomous vehicles, it is concentrating on catching up with technologies, running autonomous driving testbeds, and supporting parts companies to accelerate the transition to future vehicles. They intend to transform 1,000 vehicle parts companies into future vehicle companies by 2030.
To achieve this, it will create a comprehensive support platform to help the parts industry get ready for the future, encourage parts makers to innovate their business models and provide the resources (e.g., technology, manpower, funds, and processes) needed for business reorganisation that are compatible with factors like company size and contracting stage.
E-Mobility trend
Mobility is changing significantly because of e-mobility. Through the application of intelligent technology, it can address the problem of climate change and offer customised technologies to different consumers. E-mobility includes several shortdistance travel options with distinct features in addition to forms of transportation, like tiny electric cars.
The present mobility sector is also growing due to e-mobility technology. Legal definitions for each mode of transportation are also given, with reference to South Korea. The following are the definitions of the various forms of e-mobility, as per the applicable standards. A micro-EV is a type of miniaturised EV that has the following specifications: it must be 3.6 metres long, 1.5 metres wide, and 2.0 metres tall for one or two seats, with a maximum rated output of 15 kw or less. Two-wheeled vehicles with one or two seats and comparable structures are considered electric two-wheeled vehicles since they run on batteries. Regarding EVs, rated output refers to medically necessary electric wheelchairs and scooters for the elderly. It refers to a mode of transportation with a 15 km/h maximum speed limit. The last category of electric cars for site management includes multipurpose and special purpose vehicles with a maximum output of 20 kW. It is crucial to remember that the public does not have extremely high expectations for the level of technology when it comes to first- and last-mile mobility, even if advancements in electric motors and batteries will probably propel industry growth. Because of this, small enterprises dominate the South Korean e-mobility market, which is still in its infancy.
South Korea strategy for battery
In South Korea, the market for EV batteries is extremely competitive, with a small number of significant producers controlling much of the industry. The Ministry of Economy and Finance will financially contribute to strengthen the supply chain, including international resource development, refining, and the creation of an ecosystem for battery recycling. This will make the nation’s battery industry more competitive and supportive of emerging technologies. Additionally, it was intended to contribute to broader access to mineral sources utilised in battery manufacturing. Assistance will come in the shape of low-interest loans as well as insurance benefits for foreign assets, including those covered under the US Inflation Reduction Act (IRA). Companies investing in the development of foreign resources would also earn tax benefits. South Korea plans to create an ecosystem for waste batteries, as well as cell materials, infrastructure, and components. In order to encourage the development of an ecosystem for the used battery sector, the government has decided to invest 29 billion USD, in the secondary battery industry over a five-year period. It will support the development of next-generation secondary battery technologies from 2024 to 2028 to systematically support the industry ecosystem for recycling, reusing, and remanufacturing spent batteries. Establishing a battery life cycle history management system will encourage the distribution and use of EVs that are powered by recycled batteries and reused materials.
Outlook
Since 2013, the South Korean government has financed the introduction of clean vehicles. The targets must be raised, nevertheless, since car companies doing business have already begun to expand their production capabilities and plan to release 800,000 clean vehicles year by 2030. The clean car fleet grows to 10 million vehicles by 2030 in the K-Map Scenario depicted in Figure 5 (5.3 million BEVs, 4 million plug-in hybrids, or PHEVs, and 850 thousand hydrogen fuel-cell EVs). This fleet would grow to 24.3 million cars by 2050 (18.8 million BEVs and 5.5 million other clean vehicle categories). Furthermore, after 2040, all new combustion-engine automobiles will be prohibited. Road transport fossil fuel usage is expected to decrease by 171 TWh (14.7 million TOE) in 2030 and 407 TWh (35.0 million TOE) in 2050 (compared to 2020 levels) because of the fleet’s gradual electrification and the resulting efficiency benefits. By 2050, there will be an 80% decrease in greenhouse gas emissions from the transport sector as a result of this, having prevented 29 MtCO2e of emissions by 2030 and 78 MtCO2e of emissions by 2050.