"To Strengthen Competitiveness of Korean Device Industry, Unfavorable Regulations Must Be Lifted"

Second Meeting of the Main Industry Regulation Improvement Forum
Easing Standards for Chemical Storage Facility Installation
Request for Creating a Fair Tax Burden Environment

[Asia Economy Reporter Dongwoo Lee] In the post-COVID-19 era, the government and business circles have begun seeking solutions to ease unfavorable regulations on capital-intensive industries such as steel, non-ferrous metals, refining, and petrochemicals.

The Korea Chamber of Commerce and Industry (KCCI) and the Public-Private Joint Regulatory Improvement Task Force held the "2nd Meeting on Regulatory Improvement for Key Industries" on the 26th at the KCCI in Jung-gu, Seoul, discussing regulatory improvements and resolving current difficulties in capital-intensive industries. This meeting was the second since last month's session focused on the IT industry, as part of the "Key Industry Competitiveness Enhancement Project" jointly promoted by KCCI and the Office for Government Policy Coordination.

Park Gu-yeon, Director of the Regulatory Coordination Office and co-head of the Public-Private Joint Regulatory Improvement Task Force, stated, "In response to the COVID-19 crisis, it is more necessary than ever for everyone to make efforts and respond swiftly to restore corporate economic vitality. We will actively strive to enhance the tangible impact of regulatory innovation by directly listening to and resolving the vivid voices from the field regarding regulatory innovation for key industry companies."

During the meeting, discussions were held on easing installation standards for chemical substance storage facilities and flexibilizing the application of gas emission equipment regulations at steel mills.

The industry sought opinions on whether, for outdoor storage facilities of hazardous chemicals constructed before 2015 that are aging and being replaced, maintaining a detection and alarm system using detectors or CCTV instead of installing containment walls is valid under the Chemical Substances Control Act. This is because the Act has mandated containment walls since 2015. Accordingly, the government agreed to review the applicability of this system when replacing aging facilities if there are no safety concerns.

There was also a request to make the regulatory application for residual gas emission equipment at steel mills more flexible. Currently, by-product gas classified as hazardous chemicals due to high carbon monoxide content is recovered through separate treatment facilities when discharged via safety valves due to abnormalities in handling facilities. However, in practice, by-product gas is converted and emitted to minimize environmental impact, yet separate facilities are still required. The industry requested that the system be operated considering practical conditions, and the government will explore alternatives after confirming safety assurances.

Opinions were also expressed that a fair tax burden environment should be created in domestic and international competition to strengthen the competitiveness of capital-intensive industries.

The industry proposed adjusting tax rates on major raw materials, even temporarily, to compete under the same conditions as competitor countries. Domestic chemical companies face a 0.5% flexible tariff when sourcing naphtha, a raw material for their products, domestically and internationally, whereas competitor countries such as Japan, China, and Taiwan apply zero rates. The industry expects that adjusting flexible tariffs will lower product prices and benefit small and medium-sized processing companies in the downstream industry.

There was also discussion on excluding self-utilized by-products from waste classification. Currently, by-products generated within business sites are classified as waste even if recycled as raw materials without external discharge. This requires separate procedures such as outsourcing to specialized companies, but the request is to recognize all materials self-utilized within the same business site as raw materials.

Woo Tae-hee, Executive Vice President of KCCI and co-head of the Public-Private Joint Regulatory Improvement Task Force, said, "It is necessary to apply regulations flexibly so that regulations deviating from global standards do not adversely affect the competitiveness of our key companies."

This content was produced with the assistance of AI translation services.