Full Refund of LNG Import Surcharge on Foreign Vessels... Accelerating Transition to Eco-Friendly Economy

Refunds Starting from January Shipments This Year... 'Petroleum Business Act Enforcement Decree' Amendment Approved at Cabinet Meeting

Daewoo Shipbuilding & Marine Engineering's Ultra-large LNG Carrier

[Sejong=Asia Economy Reporter Kwon Haeyoung] The government will fully refund import surcharges on liquefied natural gas (LNG) used as fuel for ocean-going vessels. Through this, it aims to secure the competitiveness of the 'LNG bunkering' industry that supplies LNG to ships powered by LNG as a raw material, and contribute to the transition to an eco-friendly economy.

The Ministry of Trade, Industry and Energy announced that the partial amendment to the Enforcement Decree of the Petroleum Business Act containing this content was approved at the Cabinet meeting on the 21st.

According to the Petroleum Business Act, fuel for ocean-going vessels is considered an export product and import surcharges are refunded. However, the refund system had been designed mainly for 'petroleum products,' which were the primary ship fuels, and there were no refund regulations for natural gas used as ship fuel.

With this amendment, ships traveling between Korea and foreign countries will be able to receive refunds on the LNG import surcharge, which had been 24.242 KRW per kg. The refund regulation applies to natural gas supplied after January 1 of this year, and refunds will also be made for some quantities supplied before the enforcement of the amendment.

This blanket refund of import surcharges is a response to the trend of strengthened ship emission regulations by the International Maritime Organization (IMO). Earlier, the Ministry of Trade, Industry and Energy revised and implemented the 'City Gas Business Act' in August last year to establish a new category for ship natural gas operators in preparation for the emergence of the LNG bunkering market, including the expansion of LNG-powered ships, thereby laying the legal foundation for revitalizing the ship LNG bunkering market.

An official from the Ministry of Trade, Industry and Energy said, "Securing the economic feasibility of the domestic LNG bunkering business will provide an opportunity for Korea to take a leading position in the global LNG bunkering industry following eco-friendly ships," and emphasized, "The LNG fuel ecosystem can drastically reduce air pollutants compared to the existing oil fuel ecosystem, contributing to the transition to an eco-friendly economy."

LNG can reduce sulfur oxides by 100% compared to oil, and nitrogen oxides and carbon dioxide by 40-70% and 25%, respectively.

The Ministry of Trade, Industry and Energy plans to prepare subordinate regulations detailing the specifics within two months to begin full refunds of import surcharges on natural gas for ships.

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