Starting next year, if you sell an internal combustion engine car and buy an electric vehicle, the government will give 1 million won more in subsidies. An electric vehicle safety insurance policy will also be introduced, which is expected to reduce owners' liability for damages from fires.
The Ministry of Climate, Energy and Environment said on the 3rd that at the National Assembly's plenary session on the 2nd, next year's climate ministry budget and fund total expenditure was finalized at 19.1662 trillion won. That is up 9.9% from this year's 17.4351 trillion won and is 37.9 billion won higher than the government's original proposal.
By sector, the budget for energy-related projects saw the largest increase at 36.4%, followed by resource circulation (14.8%), natural environment (13.5%), water management (12%), and general environment and energy (11.2%). However, the budgets for environment (-16.5%), environmental health and chemicals (-0.9%), and climate and decarbonization (-0.2%) decreased from this year.
This budget notably expands incentives to switch to electric and hydrogen vehicles. The government created an "EV transition support payment," deciding to add up to 1 million won when owners scrap or sell internal combustion engine cars such as gasoline vehicles and replace them with electric vehicles. The new program is allocated 177.5 billion won.
The per-unit electric vehicle purchase subsidies remain the same as before, effectively increasing the subsidies. The current subsidy amounts are 3 million won for passenger cars, 700 million won for standard buses, 1 billion won for cargo vehicles, 2.1 billion won for city buses, 2.6 billion won for metropolitan buses, and 2.5 billion won for trucks.
An electric vehicle safety insurance policy to reduce owners' liability for damages in EV fires has also been introduced. A new 2 billion won budget was set aside. Next year's new electric and hydrogen vehicle infrastructure fund (charging infrastructure expansion) and the used-battery circular utilization program were allocated 74 billion won and 49.3 billion won, respectively.
In line with the government's stance, support for the transition to renewable energy also grew sharply. For RE100 (procuring 100% of electricity used from renewable energy) industrial complexes, agrivoltaics, and offshore wind expansion, 648 billion won will be allocated next year, up 98.6% from this year's 326.3 billion won. The budget to support the supply of renewable energy rose 37.1% from 156.4 billion won to 214.3 billion won.
The budget to prevent flood disasters was also expanded. A new 2.5 billion won budget was set for a pilot operation of an urban inundation forecasting system, and 110.4 billion won was allocated to install 207,000 manhole fall-prevention devices. The national river maintenance budget to prevent floods in tributaries and streams increased 25.5% from this year's 68.8 billion won to 86.3 billion won.
Minister Kim Seong-hwan of the climate ministry said the budget was arranged "with the goal of transitioning to a decarbonized green civilization, overhauling the energy system around renewables, expanding safety infrastructure in the climate crisis era, and building a society where people and the environment coexist."