Subsidy of 2.88 Billion Won Provided This Year for Road Transport Cargo Shift to Rail Transport

Ministry of Land, Infrastructure and Transport Announces Selection of Support Project Beneficiaries from 18th to 28th

[Image source=Yonhap News]

[Asia Economy Reporter Kangwook Cho] The Ministry of Land, Infrastructure and Transport announced on the 16th that it will hold a selection contest for support project recipients for 11 days from the 18th to the 28th to provide subsidies to businesses or cargo owners who switch cargo transportation from road to rail.

The total subsidy amount for this year is 2.88 billion KRW. Recipients will be selected based on the scale of the converted cargo, with priority given to excellent logistics companies and small and medium-sized enterprises within 50% and 20% of the budget, respectively.

This year, considering the recent continuous decline in rail freight volume, the subsidy payment criteria will be lowered to provide support. Accordingly, if the volume of rail conversion increases compared to previous years, the system has been improved to calculate 100% of the increased volume as the support target without any deduction rate.

The rail conversion transportation support project is a system that subsidizes the difference in logistics costs between rail and road to promote rail logistics, which has low carbon emissions and high energy efficiency, in response to global warming and the energy crisis. Since its implementation in 2010, this project has converted 7.6 billion ton-kilometers of cargo from road to rail through a total subsidy of 32.5 billion KRW until last year, reducing about 1.94 million tons of carbon emissions. This is equivalent to replacing about 1 million freight trucks and has the effect of planting approximately 300 million trees.

Oh Sooyoung, Director of the Railway Operations Division at the Ministry of Land, Infrastructure and Transport, said, "We expect active participation from logistics operators in the conversion transportation project that can practice greenhouse gas emission reduction," adding, "As the role of rail logistics is more important than ever for carbon neutrality by 2050, we plan to continuously expand the related budget size and eligible companies in consultation with financial authorities."

The Ministry plans to select support recipients in April after reviewing the transportation plans, including the volume of road-to-rail conversion, of the applicants for the contest.

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