The government has begun preparing a notice related to "just transition special zones." It has been three years since the Framework Act on Carbon Neutrality was enacted. The just transition special zone system is intended mainly to support regions expected to be affected by coal phaseout, but no region has been designated so far. With coal-fired power plant closures expected starting at the end of this year, calls are growing for designating just transition special zones.
According to the Framework Act on Carbon Neutrality on the 14th, a just transition refers to a policy direction that protects workers in regions or industries, farmers, and small and mid-sized merchants who may suffer direct or indirect harm during the shift to a carbon-neutral society, socially shares the burdens arising during the transition, and minimizes harm to vulnerable groups.
The government must establish and implement measures limited to regions designated as just transition special zones, including ▲ employment stability for corporations and small business owners and support for research and development, commercialization, domestic sales and exports, as well as ▲ livelihood support and reemployment assistance for the unemployed ▲ support for attracting investment to foster new industries ▲ support for employment promotion businesses ▲ tax support.
Industries that may suffer direct or indirect harm during the shift to a carbon-neutral society are diverse, including steel, petrochemicals, and coal. However, the just transition special zone is effectively regarded as a system for regions with coal-fired power plants. This is because high-carbon-emitting regions such as steel and petrochemicals can receive support through other systems, such as preemptive crisis response areas.
Although coal phaseout is underway, designation as a special zone remains sluggish. Three years have passed since the law was enacted in 2022, yet the number of special zone designations remains "zero," and there are no cases under review. The energy industry views this as the result of the bill being created under the Moon Jae-in administration but being deprioritized after the Yoon Suk-yeol administration changed policy direction.
Regions with coal-fired power plants see the new administration as likely to give the bill fresh momentum. This is because the Lee Jae-myung administration has pledged to abolish coal-fired power plants by 2040 and is pushing policies to expand renewable energy in their place.
Coal-fired power plants scheduled to close by 2040 number 40 units across seven regions. Most of these regions are areas with declining populations or at risk of extinction, and are expected to suffer significant blows. Starting with Units 1 and 2 of the Taean coal-fired power plant in South Chungcheong in Dec. this year, closures are scheduled next year in Boryeong, South Chungcheong, and Hadong, South Gyeongsang, followed by the Samcheonpo coal-fired power plant in 2027.
The Ministry of Trade, Industry and Energy is currently drafting a notice for just transition special zones. A government official said, "As multiple coal-fired power plants in Taean, Boryeong, Hadong, and elsewhere will be abolished starting at the end of this year, we will move quickly to support the regions and residents who have long borne the burden," adding, "We are conducting a research project with the Korea Institute for Industrial Economics & Trade (KIET) from August to October and plan to promulgate the notice early next year based on the study."
In the National Assembly, there is also a move to go beyond the Framework Act on Carbon Neutrality and enact a special law for regions where coal-fired power plants are being abolished. In the 22nd National Assembly, as many as 15 special bills related to supporting and revitalizing regions with abolished coal-fired power plants were introduced, but they remain pending due to delays in consultations with labor groups and local communities.
The office of lawmaker Heo Seong-moo, which introduced the bill early this year, emphasized the need to enact a special law, saying, "During the process of abolishing coal power, concrete issues arise, including shocks to the regional economy, employment stability for workers, and site reutilization."
The office added, "When abolishing power plants, a legal mechanism is needed that contains tailored support measures, such as ways to compensate for losses in local tax revenue and employment, how to institutionalize direct hiring and stability for workers, and how to convert power plant sites to uses such as ESS and renewable energy."