The government, together with Hyundai Motor and Kia, will support carbon reduction by auto parts partner companies.
The Ministry of Trade and Industry (MOTI) and the Ministry of SMEs and Startups held the "automotive supply chain carbon reduction win-win agreement ceremony" on the 17th at JW Marriott Dongdaemun in Jongno-gu, Seoul. Attending were Hyundai Motor and Kia, 87 auto parts partner companies, and officials from the Korea Auto Parts Industry Promotion Foundation.
The ceremony was held to strengthen the carbon competitiveness of Korea's auto industry as major countries, including the European Union (EU), are refining carbon regulations from the existing "business sites unit" to a "product unit."
Through this agreement, the Ministry of Trade and Industry (MOTI) and Hyundai Motor and Kia decided to support first-tier partners in replacing equipment to reduce carbon. The first-tier partners will then return funds equal to the support they received and, together with the Ministry of SMEs and Startups, again support equipment replacement for second-tier partners.
With this activity, Hyundai Motor and Kia are expected to lower the carbon footprint of complete vehicles and use allowances secured through external projects as offset credits under the emissions trading scheme going forward. Under the Emissions Trading Act, companies subject to the emissions trading scheme can convert reduction results secured by investing in external areas into allowances to offset their emissions.
Park Dong-il, head of industrial policy at the Ministry of Trade and Industry (MOTI), said, "Carbon reduction across the supply chain is not something any single company can do alone," adding, "It is a task that requires collaboration among the government, large corporations, small and medium-sized companies, and mid-sized companies."
A Hyundai Motor and Kia official said, "This agreement is a practical cooperation model for a low-carbon transition of the supply chain created jointly by corporations, the government, and public institutions," adding, "It will serve as priming water for practicing sustainable management and transforming the industrial ecosystem."
On the back of this agreement, the government plans to expand policy and financial support so that carbon reduction efforts spread throughout the industrial supply chain.