The "Carbon Dioxide Capture, Usage and Storage Act" (the CCUS Act) proposal has been passed at a plenary session of the National Assembly on January 9, 2024 and is scheduled to come into effect one year after its promulgation. The CCUS, representing the capture, utilization, and storage of carbon dioxide, technology is globally recognized as a bridge technology for achieving carbon neutrality by 2050, and the legislation supporting CCUS-related projects is being actively advanced at a global level. For instance, in the United States, the Inflation Reduction Act has established a tax-credit program that offers $85 per ton of CO2 for carbon dioxide capture and storage (CCS) projects and $60 per ton of CO2 for CCUS projects. Meanwhile, the European Union, under the Net-Zero Industry Act, aims to reach an annual carbon storage capacity of 50 million tons by 2030 and has designated CCS technology as one of the eight 'Strategic Net Zero Technologies'. The initiative is fostering robust private sector engagement by streamlining the permitting process and facilitating the commercialization of the related projects.
In the 1st National Basic Plan for Carbon Neutrality and Green Growth, published in April 2023, the Korean government revised the greenhouse gas absorption/removal targets in the 2030 Nationally Determined Contribution through CCUS technology from the original 10.3 million tons (as of October 2021) to 11.2 million tons. Recently, on January 5, 2024, an empirical project for the East Sea Gas Field utilizing CCUS technology, valued at KRW 2.9529 trillion, was selected as a preliminary feasibility study project to be pursued as a national project.
- Key Provisions of the CCUS Act
The enactment of the CCUS Act is recognized as laying the legal groundwork for the implementation of CCUS policies at national level. The CCUS Act categorizes CCUS projects into capture, transportation, and storage operations and details the necessary permits and support measures for each. Its key provisions are as follows:
- Implications
South Korea, with its high greenhouse gas emissions in the power sector and a substantial proportion of heavy emission industries like steel, cement, and petrochemicals, is a nation that particularly necessitates the adoption of CCUS as a viable solution for achieving carbon neutrality. Previously, CCUS-related regulations were dispersed across more than 40 different laws, and notably, captured carbon dioxide was considered as waste under the Waste Management Act, thereby subjecting it to its regulations. With the enactment of the CCUS Act, it is anticipated that lowered regulatory risks for CCUS facilities will pave the way for diverse administrative and the relevant industry. As such, business entities seeking new business opportunities in the CCUS industry or looking to use CCUS as a means to achieve carbon neutrality should closely observe the changes in the business landscape following the implementation of the CCUS Act and the legislative trends regarding the specific details of the support measures in future subordinate decrees and regulations
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