The government is expected to announce measures as early as next month to support exports of overseas plants, sources said on the 15th. The core is to sign agreements to provide developing countries with eco-friendly plant technology and financing, and to offer financial benefits to domestic corporations that build those plants. Through this, the government can also gain a portion of the greenhouse gas reductions generated by overseas eco-friendly plants.
The reason the government is rolling out measures to support exports of overseas plants now is that Korean corporations' order intake has slowed this year. According to the Ministry of Trade and Industry (MOTI), orders rose to $24.2 billion in 2022, $30.2 billion in 2023, and $34.1 billion last year. Results for January–September this year also climbed to $38.4 billion, up about 80% from the same period last year ($21.3 billion), but that included the exceptional win of the new Dukovany nuclear power plant in the Czech Republic ($18.7 billion).
Excluding the new Dukovany nuclear power plant order in the Czech Republic, the tally is $19.7 billion, down 7.5% from last year. In particular, in the Middle East—the largest overseas plant market and accounting for about 25% of Korea's total—the figure fell by nearly 15% from last year.
The government's forthcoming measures to support overseas plant exports are said to benchmark Japan's "Joint Crediting Mechanism (JCM)." JCM is a system Japan developed independently. After the Fukushima nuclear accident in 2011 made it difficult to meet its greenhouse gas reduction target (NDC), Japan devised this as a workaround.
Japan is signing agreements with developing countries through JCM. For developing countries that plan to install low-carbon plants such as renewable power stations, it provides a loan at an interest rate below market rates through an Asian Development Bank (ADB)-linked fund. Japanese corporations that build the plants receive subsidies covering up to 50% of initial investment costs.
Since rules for international emissions trading were finalized at the 2021 U.N. climate conference (COP26), Japan has signed JCM agreements with 31 countries, including Chile, Myanmar and Thailand, and is pursuing more than 280 projects.
The measures the Korean government is pursuing to support exports of overseas plants differ from Japan's JCM. Japan pushed JCM to meet its NDC target, which in effect supported its own plant corporations. By contrast, Korea is said to be pushing JCM with the aim of supporting plant exports.
Meanwhile, Korea and Japan differ in their core markets in the overseas plant sector. Korea wins large projects in the Middle East market, while Japan mainly advances into the Asian market.