KOR
▲ Visitors look around EV Trend Korea 2026 at the 2026 Future Mobility Week held at COEX in Gangnam-gu, Seoul, on August 25.
The Ministry of Climate, Energy and Environment has formulated a record-breaking budget proposal of KRW 25.73 trillion for next year.
The ministry has decided to focus finances on the green transition, such as increasing the supply of electric vehicles from 300,000 units this year to 430,000 units next year and expanding related budget allocations to KRW 2.14 trillion.
A total of KRW 1.9 trillion will be injected into power and water infrastructure for mega-projects.
The Climate Ministry announced today (the 1st) that the 2027 budget proposal containing these measures was approved during the Cabinet meeting.
Total expenditures for next year's budget stand at KRW 25.7319 trillion, an increase of KRW 3.9737 trillion (18.3%) compared to this year.
The budget for EV distribution will be raised to KRW 2.1403 trillion next year, up 32.8% from KRW 1.6114 trillion this year.
The volume of subsidized vehicles will be expanded from 300,000 to 430,000 units, and transition subsidies will also be introduced for commercial vehicles such as taxis.
The budget for electric motorcycle distribution will also increase by 43.8% to KRW 23 billion, compared to KRW 16 billion this year.
In line with the expansion of EV supply, the subsidy system is also being revamped.
While tax benefits are expected to decrease primarily for high-end EVs as the individual consumption tax reduction limit for passenger cars is scaled back from KRW 3 million to KRW 2 million next year, the Climate Ministry plans to minimize the impact on the pace of EV adoption.
It projected that the vehicles actually affected by the reduction in the individual consumption tax cut limit will be EVs priced over approximately KRW 55 million.
Regarding local governments' issues in securing subsidy resources, the ministry plans to improve and announce the subsidy policy by the end of the year.
Additionally, the government will increase the thermal energy electrification budget—aimed at shifting heating and heat demand away from fossil fuels toward electricity—by 447.1% from KRW 15.7 billion to KRW 85.9 billion, and expand the program from a focus on detached houses to apartment complex demonstrations.
To support the competitiveness of cutting-edge industries such as semiconductors and artificial intelligence (AI) data centers, the government will proactively expand power and water infrastructure.
The related budget totals KRW 1.9351 trillion, with KRW 1.5489 trillion allocated to the power sector and KRW 386.2 billion to the water sector.
Along with this, the government has decided to increase the urban flood prevention project budget for the Gangnam Station, Gwanghwamun, and Dorimcheon areas by 268.8%, from KRW 22.1 billion this year to KRW 81.5 billion.
Two mobile seawater desalination facilities will also be newly introduced to respond to droughts, with KRW 3 billion allocated for the related budget.
(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.
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