Batteries, oil reserves top Korea’s trade budget focus

Spanish Market: Battery materials, Electricity
28/08/24

South Korea's trade, industry and energy ministry (Motie) today announced its 2025 budget proposal, which has a focus on fostering high-tech industries such as batteries and semiconductors, and bolstering oil reserves.

Other key areas include ensuring reserves of key metals, as well as expanding low-carbon energy.

Motie's proposed 2025 budget totals W11.5 trillion ($8.6bn), up by 0.2pc or W21.8bn from the previous year.

The budget proposal will be submitted to the National Assembly in early September for approval and will be confirmed in December.

High-tech industries

Motie will expand funding for developing high-tech strategic industries such as semiconductors and secondary batteries by 17pc to W2.09 trillion in 2025.

The ministry will extend support totalling W31.2bn to further develop battery management system technology and infrastructure to assess the safety of electric vehicle (EV) batteries, with the ministry citing recent heightened safety concerns following multiple fires involving EVs. The incidents had prompted domestic EV manufacturers to disclose otherwise confidential battery information.

Resource security

Motie will raise funding to boost economic security by 1.4pc to W1.85 trillion in 2025, which includes developing resources, as well as bolstering stockpiles of oil and key minerals.

Of the W1.85 trillion, investment in developing oil fields will rise by 5.2pc to W50.6bn. This includes funds to support the first exploration drilling in the deep-sea gas field in the east sea, with results expected by the first half of 2025. The country plans to invest W79.9bn in 2025, up by 20pc from 2024, in oil storage, and to expand oil reserves to over 100mn bl.

Stockpiling of key minerals such as lithium, cobalt and rare earth elements will continue, but the South Korean government is shifting its focus to building and maintaining stockpile infrastructure given stable mineral prices. Its budget for key minerals stockpiling will be lowered by 58pc from this year's W233.1bn to W96.9bn for 2025, but the allocated budget for construction and maintenance will surge by over sixfold to W116.3bn from this year's W18.7bn. The country will also support concluding supply deals for urea and further develop technology to cut import dependence.

Low-carbon energy

Motie's "carbon-free" energy budget is largely focused on developing the nuclear power industry as a key export driver, with W11.6bn allocated. The Czech government in July selected Korea Hydro and Nuclear Power (KHNP) as the preferred bidder for the installation of two nuclear reactors at the site of its 2GW Dukovany power plant, although US nuclear developer Westinghouse and French utility EdF are challenging the tender results.

The government is also extending W198.4bn in funds to expand renewable energy supply. Of this, W42bn will be allocated to support low-carbon energy projects, which Motie expects to attract funding of up to W525bn in the renewable energy market.

By Tng Yong Li and Joseph Ho

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