SEOUL, South Korea will provide more than 38 trillion won (US$28.8 billion) of financing support to the rechargeable battery industry over the next five years to help boost the competitiveness of the promising sector, the finance ministry said Wednesday.
The government also decided to boost reserves of critical minerals necessary for battery manufacturing and nurture the battery reusing and recycling ecosystem in an effort to reduce reliance on China and a handful of other nations for supplies of key minerals, according to the Ministry of Economy and Finance.
This illustration on June 30, 2023, depicts the South Korean battery industry. (Yonhap)
Under the plan, the government will provide more than 38 trillion won worth of financial support for companies across the battery industry starting next year through 2028.
Companies will be able to take out cheap loans and get insurance benefits regarding their investment in the United States with regard to the U.S.’ Inflation Reduction Act (IRA) and elsewhere.
The government plans to create a fund worth 1 trillion won to promote the industry and invest 73.6 billion won in relevant research and development projects.
In a move to better brace for a supply crunch, the government decided to boost state inventory of lithium and other critical minerals and provide some 250 billion won to companies for refining those materials.
It plans to establish a new storage center for lithium, cobalt and other items at a Saemangeum industry complex on the west coast by 2026 with a budget of around 240 billion won.
Companies will be able to receive tax credit for investment in overseas resources development.
South Korea is heavily dependent on China for supplies of major industry minerals but has been working to reduce its reliance and diversify their supply channels in response to such regulations as the IRA and the European Critical Raw Materials Act, as well as restrictive moves by China on their exports.
The envisioned financial support will also focus on nurturing the battery recycling sector.
In the case of reusing all batteries, the country is expected to secure critical minerals enough for about 170,000 EVs every year.
The government will set up a system for the integrated management of information on batteries for electric vehicles from their manufacturing to recycling with a goal to boost their safety, and establish a task force involving experts to devise detailed measures, according to the ministry.
Source: Yonhap News Agency