Kim Sung-hwan, Minister of Climate, Energy and Environment, stated that industrial electricity tariffs need to be lowered from current levels to strengthen industrial competitiveness. The ministry plans to unveil a regionally differentiated electricity tariff scheme soon.

At a press conference on the morning of the 4th at the Government Complex Seoul marking the first anniversary of the Lee Jae Myung administration, Minister Kim said, “During the previous administration, industrial electricity tariffs were unilaterally raised, so now industrial electricity tariffs are the highest,” and added, “Since they are burdening domestic industrial competitiveness, there is a need to stabilize them downward.”

Currently, the domestic industrial electricity tariff is around 181 won per kilowatt-hour (㎾h), far exceeding the average industrial electricity tariffs in China and the United States (in the 120-won range). Minister Kim stressed the need to ease the burden of industrial electricity tariffs in light of the reality that domestic manufacturing competes with China.

As a measure, he proposed a regionally differentiated tariff system. Under this system, areas near power plants that produce electricity would pay less, while distant areas such as the Seoul metropolitan area would pay more. If introduced, power-intensive companies such as steel and petrochemicals could reduce their electricity cost burden.

Minister Kim said, “Taking into account transmission network costs, power self-sufficiency, and balanced national development, we will push for a regionally differentiated tariff system,” and added, “We have already completed the internal design of the system, and after inter-ministerial consultations, we will soon gather opinions through a public hearing.”

He drew a line under the possibility of additional electricity rate increases. He said, “During the Russia-Ukraine war, gas prices surged and we failed to respond properly, which greatly drove up power generation costs, and that burden led to losses at Korea Electric Power Corporation,” and added, “This is not the same situation now.”

He continued, “The point at which KEPCO runs a deficit is when the annual average system marginal price (SMP) exceeds 146 won, but it is currently in the 120-won range, so the burden is not large.”

Regarding the comprehensive anti-plastic measures that were initially scheduled to be announced in January, he said the policy direction has been decided internally. As a key policy, he mentioned introducing a multi-use cup discount scheme instead of a disposable cup deposit program.

Minister Kim said, “At major franchises, when customers take beverages in multi-use cups or tumblers, we will have them receive a discount of about 300~400 won compared with using disposable cups, thereby minimizing disposable cup use,” and added, “Rather than restricting the cups themselves or requiring deposits, this will be absorbed into the producer responsibility recycling (EPR) framework.”

However, Minister Kim said, “Although the government plan has essentially been prepared, there are still areas that are insufficient overall,” and added, “We will prepare a separate occasion to report to the public by combining the contents reported to the Cabinet meeting, the policies decided last December, and additional matters under review.”