FSC Holds First Climate Finance Task Force Meeting... 790 Trillion Won Plan Through 2035

The South Korean government is accelerating its climate finance support to achieve national greenhouse gas reduction targets and carry out carbon reduction activities.

The Financial Services Commission (FSC) held the first meeting of the Climate Finance Activation Task Force (TF) today (the 14th) at the Government Complex-Seoul, chaired by Jeon Yo-seob, Director General for Financial Policy, to review climate finance performance and discuss cooperation measures to establish transition finance.

Attendees at the meeting included the Ministry of Climate, Energy and Environment, the Ministry of Trade, Industry and Energy, the Ministry of SMEs and Startups, the Financial Supervisory Service (FSS), the Korea Credit Information Services, private experts, the Korea Federation of Banks, and KB and Shinhan financial groups.

In accordance with the Climate Finance Activation Measures announced in February, the FSC has established and is implementing a plan to supply a total of 790 trillion won in climate finance from 2026 through 2035.

According to the FSC, as of July this year, five policy financial institutions (Korea Development Bank, Export-Import Bank of Korea, Industrial Bank of Korea, Korea Credit Guarantee Fund, and Korea Technology Finance Corporation) supplied a total of 42 trillion won, achieving 74.1 percent of their annual target.

Specifically, the Korea Development Bank invested 20. billion won in Company A, a motor and generator manufacturer, for hydrogen- and ammonia-based energy production.

The Export-Import Bank of Korea provided a loan worth 200 billion won to Company B, a cable manufacturer, to support wind-based energy production, and the Korea Credit Guarantee Fund provided 7 billion won in Primary Collateralized Bond Obligation (P-CBO) guarantees to Company C, an auto parts manufacturer, to support recycled raw materials and circular resources.

The government is also accelerating the institutional foundation for transition finance to help companies transition to eco-friendly practices.

Through the Transition Finance Working-level TF, the FSS drew up a draft of working-level best practices reinforcing detailed working-level criteria for each provision of the transition finance guidelines at the end of August, and plans to finalize the final version by the end of October.

The FSS stated, "Based on this, we will support financial companies in launching pilot products and review measures to link with the 'industry-specific carbon reduction roadmap' by the end of the year so that financial companies can utilize it when screening transition finance."

In this regard, the Ministry of Trade, Industry and Energy shared plans for an industry-specific carbon reduction roadmap reflecting the 2035 Nationally Determined Contributions (NDC) for five carbon-heavy industries: steel, petrochemicals, cement, oil refining, and electronics assembly.

Infrastructure construction work will also be carried out in parallel.

The Korea Credit Information Services established the Climate Finance Web Portal service in August to support the entire process of handling climate finance by financial institutions, external review agencies, and public institutions.

Moving forward, it plans to expand the target of the web portal to insurance companies, financial investment firms, and savings banks, while also commencing the concentration of banking sector climate finance performance and providing related statistical information.

Meanwhile, the Ministry of Climate announced the direction for operating its 2027 fiscal support project, which provides support for bond and loan interest costs and guarantee supplies for green and transition investments that align with the Korea-Taxonomy (K-Taxonomy) and corporate transition strategies.

It also stated that it will enhance interoperability with major countries' taxonomies, such as those of the European Union (EU) and Singapore, and support companies in autonomously disclosing revenue and investment amounts eligible under the K-Taxonomy.

The FSC stated, "We will continuously review policy implementation status by operating the Climate Finance Related Organizations TF," adding, "In subsequent meetings, we plan to discuss strengthening the legal and institutional foundations to promote climate finance and linking sustainability disclosures with transition finance."

(Photo: Provided by the Financial Services Commission, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.