Electric Vehicle Subsidies Effectively Increased Next Year... 'EV Safety Insurance' to be Introduced

Ministry of Environment to Maintain Subsidy Unit Price in Next Year's Budget... Additional 1 Million Won for Switching from 'Internal Combustion to Electric'

No Budget Allocated for New Dam Construction... 44.3 Billion Won Assigned for 'Four Major Rivers Renaturalization'

Rollout of 'Air-Source Heat Pumps' Begins... 'Solar Pension' for 'Water Source Protection Villages'

 Fire authorities are using mobile water tanks to extinguish an electric vehicle fire that occurred near Yupyeong Tunnel in Munbeop-ri, Mongwang-myeon, Goesan-gun, Chungbuk, around 8:54 a.m. last month on the 7th. [Provided by Goesan Fire Station. Resale and DB prohibited]

Electric vehicle purchase subsidies will not be cut next year and will remain the same as this year. If one replaces an internal combustion engine vehicle, such as a gasoline car, with an electric vehicle, an additional subsidy will be provided, effectively increasing the benefit.

The Ministry of Environment unveiled its budget for the upcoming year on the 2nd.

The Ministry of Environment has set its budget and fund expenditures, including the Climate Response Fund, at 15.916 trillion won, a 7.5% increase from this year.

Looking solely at the budget (14.1154 trillion won), it represents an 8.7% increase compared to this year's original budget (12.9839 trillion won).

When the Ministry of Environment's budget is divided into seven sectors, the 'Water Management' sector saw the largest increase at 14.3%, followed by Natural Environment (11.1%). The budget related to climate change response and greenhouse gas reduction only increased by 1.9%.

◇ EV Subsidies Maintained... New 'Conversion Incentive' of Up to 1 Million Won

 The largest electric vehicle fast-charging station in Korea, located at KINTEX in Goyang, Gyeonggi Province. [Provided by Goyang City. Resale and DB prohibited]

The Ministry of Environment maintained the unit price for electric and hydrogen vehicle purchase subsidies in next year's budget proposal, keeping them the same across all vehicle types as this year.

For electric vehicles, the unit subsidy per vehicle is 3 million won for passenger cars, 70 million won for buses (standard), and 100 million won for trucks. For hydrogen vehicles, it is 22.5 million won for passenger cars, 210 million won for city buses, 260 million won for intercity buses, and 250 million won for trucks.

Since the Ministry of Environment began providing subsidies for electric vehicles in the public sector in 2011, it has reduced them every year. The goal was to encourage electric vehicles to become self-sustaining without subsidies.

However, with the stagnation in adoption rates following the heightened focus on electric vehicle fire risks last year, the decision was made not to cut subsidies next year.

The Ministry of Environment has decided to provide an additional subsidy of up to 1 million won if an internal combustion engine vehicle is scrapped or sold and an electric vehicle is purchased. A new budget of 177.5 billion won has been allocated for this 'Electric Vehicle Conversion Incentive'.

The target for EV subsidy distribution next year has been set at 300,000 vehicles, and 7,820 for hydrogen vehicles.

This is a reduction from this year, which is interpreted as a reflection of the recurring issue of unused budget due to the adoption of electric and hydrogen vehicles falling short of government targets.

The Ministry of Environment will also launch a new loan program for transportation operators to purchase electric and hydrogen buses.

Furthermore, 2 billion won will be invested to introduce 'EV Safety Insurance'.

This is to alleviate the burden on vehicle owners who may need to pay for damages resulting from an electric vehicle fire. The Ministry of Environment's plan is to create an insurance policy that covers amounts exceeding existing auto insurance limits, funded by government budget and an additional 4–6 billion won from automobile manufacturers.

Some point out that since electric vehicle manufacturers are already enrolled in product liability insurance, this is redundant, and that it provides excessive support to high-income earners who can afford electric vehicles, which are more expensive than internal combustion engine cars.

◇ Air-Source Heat Pump Rollout... 'Solar Pension' for Water Source Villages

Daeho Lake Floating Solar Power Plant [Provided by Korea East-West Power. Resale and DB prohibited]

The Ministry of Environment has decided to launch a new 'Air-Source Heat Pump Distribution Project' in place of the 'Low-NOx Boiler Distribution Project' and has allocated 9 billion won in next year's budget. A heat pump is a device that moves heat by compressing and expanding refrigerant; while it can reduce fossil fuel consumption, it has been noted that it can cause a greenhouse effect due to refrigerants and may not be suitable for Korea, where there is a large seasonal temperature variation.

The Ministry of Environment's plan is to replace kerosene boilers in areas where city gas is not supplied with heat pumps.

A 'Resident-Led Solar Pension Pilot Project' will also be newly implemented next year, which involves installing solar power facilities on communal buildings such as village halls or warehouses in water source management areas where residents' property rights are restricted, and sharing the profits with the residents. A budget of 4.9 billion won has been earmarked for this project.

The Ministry of Environment has allocated 18.1 billion won for the Carbon Neutrality Point system, a 13.1% increase from this year's 16 billion won. This is because the suspension of payments due to budget shortages had become a recurring issue. Carbon Neutrality Points are awarded for participating in activities that help reduce greenhouse gas emissions and can be used like cash.

The budget for the reusable container distribution project has also increased to 15.7 billion won, a 57.1% increase from this year (10 billion won).

This is to expand the reusable container distribution project (from 119 to 163 local governments) in areas with high disposable product usage, such as local festivals, cafes, restaurants, and baseball stadiums.

◇ No Budget for New Dams... Anti-Fall Facilities for All Manholes in 'Intensive Management Zones'

Environment Minister Kim Sung-hwan visits Jicheon Dam candidate site (Cheongyang=Yonhap News) Reporter Lee Joo-hyung = Environment Minister Kim Sung-hwan listens to residents' opinions at the Jicheon Dam candidate site in Jangpyeong-myeon, Cheongyang-gun, Chungnam, on the 29th. 2025.8.29 coolee@yna.co.kr

The Ministry of Environment did not include a budget for new dam construction in its budget proposal for next year.

The reason is that a comprehensive review on whether to build new dams is currently underway. If, as a result of the review, it is decided to proceed and a budget is required for feasibility studies, the plan is to use the remaining funds from this year's budget.

Regarding the 'Four Major Rivers Renaturalization' project, a pledge of President Lee Jae-myung, 44.3 billion won has been earmarked, including 38 billion won for improving 48 intake and pumping stations affected by water levels in the Four Major Rivers' weirs.

405.4 billion won was allocated for sewage pipe maintenance, such as 'deep underground rainwater tunnel installation,' and 772.9 billion won for the maintenance of aging water and sewage systems. Both are increases from this year.

The Ministry of Environment will invest 110.4 billion won to install anti-fall devices on all 207,000 manholes within 'intensive rainfall management zones' nationwide, excluding Seoul, next year.

◇ 10 Billion Won Contribution to Solve Humidifier Disinfectant Issue... Full-Scale Research on 'Lovebugs'

The Ministry of Environment has set aside 10 billion won in government contributions to resolve the humidifier disinfectant issue.

This follows last year's court ruling that the government also holds partial responsibility for the humidifier disinfectant issue. The government is pursuing a 'final resolution through social consensus.'

500 million won will be invested in identifying the causes of mass outbreaks of insects like the Plecia nearctica (Lovebug) and strengthening response systems.

2.2 billion won has also been earmarked to research the ecology of migratory birds living near airports to prevent 'bird strikes.'

Ministry of Environment staff conducting Lovebug extermination at Mt. Gyeyang, Incheon (Seoul=Yonhap News) On the 4th, staff from the Ministry of Environment and its affiliated agencies are using blowers and insect nets to remove adult Lovebugs that are active around Mt. Gyeyang in Incheon. 2025.7.4 [Provided by Ministry of Environment. Resale and DB prohibited] photo@yna.co.kr