South Korea will spend 107 trillion won (US$84.5bn) or 2% of its annual GDP, on environment-related industries over the next five years, the presidential office said in a statement on Monday.
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The investment, mainly for encouraging green growth industries and technologies including hybrid cars, is expected to create up to 1.81m jobs, the government said.
Under president Lee Myung-bak’s regime, Seoul’s Blue House has been trying to find a way to revitalise the country’s slowing economic growth by capitalising on the global drive to reduce polluting gas emissions, Reuters noted.
“The investment is a move in the right direction as it signals the government’s intention to boost its competitiveness by leading in the greentech sector,” said Yong-Jin Kim, head of global business group at Daishin Investment Trust Management.
“Korea could be a niche player in the global greentech market as it promotes its LEDs and other manufacturing industries such as the auto industry with the focus on doing research to make production processes environment friendly.”
The government gave no specific details over how it would fund the plan.
As part of the plans the government will require automakers including Hyundai Motor and Kia Motors to either raise the average fuel efficiency of their vehicles above 17km per litre or cut greenhouse gas emissions below 140g/km from 2012, the Blue House statement said.
“To advance in green car development, South Korea plans to raise the bar for auto fuel efficiency and greenhouse gas emission rules above US standards,” a separate statement from the government said.
Cars made in South Korea, the world’s fifth largest auto producer, currently have an average fuel efficiency of 11km/litre and emissions of 201g/km
Aggressive new standards unveiled by the United States in May would raise average fuel efficiency standards for all new passenger vehicles to 35.5 miles per gallon by 2016, the equivalent of 15.1km/litre.
South Korea will apply the new fuel efficiency and emission rules to 30% of cars sold by each automaker in 2012, rising to 100% by 2015, the report said.
The government also aims to raise South Korea’s international market share of green technology products to 8% by expanding R&D investment and strengthening industries such as hybrid cars.
