Industrial Sector Policy Evaluation for Greenhouse Gas Reduction

Published on July 29, 2025
Published by Economic Industrial Program Evaluation Division

   Since the adoption of the Paris Agreement in 2015, countries around the world have worked together to achieve carbon neutrality by 2050 in order to address the global challenge of climate crisis. Korea has joined these global efforts, establishing the 1st National Framework Plan on Carbon Neutrality to achieve the 2030 Nationally Determined Contribution (NDC).
   If Korea is to achieve the 2030 NDC and eventual carbon neutrality by 2050, one of the government's most pressing challenges is meeting the greenhouse gas emissions reduction targets as certain industrial sectors with high greenhouse gas emissions face structural limitations. In particular, with carbon leakage emerging as a new trade barrier, there is a growing need for more proactive measures.
   Against this backdrop, this report analyzes major industrial sector policies for greenhouse gas emissions reduction aimed at securing core carbon-neutral technology, supporting businesses, and improving the Emissions Trading System (ETS). The key findings from the analysis are as follows:
   First, with regard to securing core carbon-neutral technology, the government needs to promptly redesign its tasks and missions in consideration of a wide range of variables throughout the strategic roadmap for technology innovation by maintaining a flexible response system that supports ambitious targets set by each technological sector.
   Second, regarding support policies that help businesses transition to a low-carbon industrial structure, the government should consider adjusting the scope of carbon-neutral technologies eligible for the tax credit program for new growth and source technologies to improve their effectiveness. In addition, business operational efficiency should be improved by integrating the management of fiscal programs.
   Third, to advance the ETS, efforts should be made to stabilize the ETS market by absorbing the excess supply of emissions allowances and explore the adoption of reasonable criteria for paid allowance allocation to prepare for global carbon trade barriers.