The Ministry of SMEs and Startups held the 25th review committee on regulatory sandbox special cases and said on the 4th it is pushing ahead with procedures to newly designate Regulatory Free Zones and Global Innovation Regulatory Free Zones in 2026.
This year's Regulatory Free Zones will target four regions: South Gyeongsang, North Gyeongsang, Ulsan and North Jeolla. South Gyeongsang plans to establish standards for related facilities through a bidirectional power generation demonstration that mutually converts electricity and hydrogen. North Gyeongsang will push a demonstration to expand the scope of cultivation and use of cannabis limited to the purpose of developing medical pharmaceuticals.
Ulsan will carry out a demonstration project to use high-purity oil extracted from industrial plastic waste as an alternative fuel to petroleum, and North Jeolla will pursue measures to broaden the items eligible for clinical trials for companion animals and to streamline toxicity testing procedures.
Three sites in total are up for new designation as Global Innovation Regulatory Free Zones: two in North Gyeongsang and one in South Jeolla. North Gyeongsang, in cooperation with institutions including Crimson University in the United States, will push a road-driving demonstration of low-speed vehicles that are not permitted domestically.
It will also join with test institutions in Iceland and other Nordic countries to demonstrate converting small fishing boats to electric vessels. South Jeolla will push a joint demonstration project with Southeast Asian countries for special-purpose three-wheeled electric two-wheelers for refrigeration and cleaning.
Regulatory Free Zones are a system that grants rapid regulatory confirmation, demonstration exemptions and temporary permits in new technology and new industry fields. The Ministry of SMEs and Startups (MSS) has designated 49 Regulatory Free Zones nationwide since the system was introduced in 2019 and has granted 136 regulatory exemptions to date. As of May this year, 62 statutes have been revised through zone demonstrations, and results have also included attracting investment and the transfer of corporations to the provinces.
The battery recycling Regulatory Free Zone in North Gyeongsang, designated in 2019, is cited as a representative case. It was the first in the country to allow demonstrations for the reuse and recycling of batteries after their use in electric vehicles. EcoPro, a participating corporation, grew into a key corporation in the battery supply chain based on the technological capabilities and operational experience secured during the demonstration process and advanced into overseas markets. Corporations participating in the zone, including EcoPro, achieved cumulative sales of 600 billion won, 800 new hires and 250 billion won in attracted investment.
Minister Han Seong-sook of the Ministry of SMEs and Startups (MSS) said, "The Regulatory Free Zone system is a system that, together with local governments, rationalizes regulations on new industries and fosters regional industries." She added, "We have pushed bold regulatory improvements in advanced industries such as bio and Climate Tech," and "we will upgrade the Regulatory Free Zone system, representing small and venture businesses, so that the results can lead to 'smart regulation.'"