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| Minister of Trade, Industry and Energy Lee Chang-yang, sixth from left, and the heads of battery manufacturers pose for a photo at an event, organized to recognize the growth and efforts of the local battery manufacturing industry, at JW Marriott Hotel Seoul, Tuesday. Courtesy of Ministry of Trade, Industry and Energy |
By Lee Kyung-min
The government is aiming to make Korea-produced batteries account for at least 40 percent of global market share by 2030, as assisted by the establishment of an intergovernmental alliance to secure key battery materials, fostering a sustainable industrial ecosystem and expansion of tax credits, the trade ministry said Tuesday.
Public-private partnerships will be fortified to help advance mineral resourcing, refining and smelting, key areas many local firms lack experience with and expertise in compared to their global peers.
The objective is part of a long-term strategy to elevate the country and become a global battery powerhouse, as reinforced by a 50 trillion won ($35 billion) investment commitment from battery manufacturers all the way to 2030. The investment will lead in turn to manufacturing capacity increasing 1.5 times by 2025. The manufacturing capacity for cathode and anode ― two key input materials ― will subsequently soar three-fold and two-fold, respectively.
The Ministry of Trade, Industry and Energy said the public-private partnership will prioritize the stability of the battery supply chain and bolster high-tech research and development innovation.
The strategy outlined a vision of a close public-private partnership in the rechargeable battery industry for innovation and a sustainable cooperation system, according to Minister of Trade, Industry and Energy Lee Chang-yang.
"Global uncertainty is growing due to supply chain instability, but the current crisis can become an opportunity for new growth," he said.
The government will form and strengthen alliances with resource-rich countries, including Australia, Canada and Chile.
Materials secured from the three countries will be refined there, or in nearby countries with which the U.S. has a free trade agreement.
The move followed the implementation of the contentious U.S. Inflation Reduction Act (IRA) whereby tax credits for purchasers of electric vehicles (EVs) will be denied or curtailed, unless EV batteries contain at least a certain percentage of minerals mined or processed in the U.S. or countries that have a free trade agreement with America.
Up to 3 trillion won in loans and guarantees will be provided over the next five years for industry players investing in refining and smelting projects, as mediated and overseen by Korea Trade Insurance Corp., an export credit agency and Export-Import Bank of Korea (Eximbank), a state-run lender.
The sustainability of the industry will be fostered by the establishment of an effective battery recycling system, a goal critical to expanding the EV market presence in Europe where new stricter battery standards exist.
The government will spend 1 trillion won for the development of core battery technologies that help to increase the driving distance of an EV on a single charge up to 800 kilometers.
Tax credits for facility investments made by large firms will be increased to a range of between 8 and 12 percent, up 2 percentage points from the current range of between 6 and 10 percent.
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