🚨 Green Finance

Today Korean Social News for Beginners | 2025.09.03

0️⃣ Expanding Eco-friendly Investment and Electric Car Conversion Support

📌 Electric Car Conversion Support Expanded...Green Finance Investment Increased to 8.6 Trillion Won

💬 The Ministry of Environment greatly increased electric car conversion support and green finance investment through the 2026 budget plan. When you replace a gas car with an electric car, you can get up to 1 million won in additional support. Combined with the basic subsidy, you can receive up to 4 million won in total support. The green finance budget expanded from last year's 7.7 trillion won to 8.6 trillion won, about 900 billion won increase, which will be used to support eco-friendly companies and startups. Budgets for environment and safety areas like climate disaster response, green algae measures, and forest fire prevention also increased significantly. This shows the government's strong commitment to achieving carbon neutrality goals. This is evaluated as a comprehensive policy that supports individuals' eco-friendly choices while promoting growth of the entire related industry ecosystem.

💡 Summary

• Green finance is financial activities that provide funding to businesses focused on environmental protection and climate change response.
• The 2026 green finance budget expanded to 8.6 trillion won to support eco-friendly companies and startups.
• When converting to electric cars, you can receive up to 4 million won in support, actively encouraging individuals' eco-friendly choices.

1️⃣ Definition

Green Finance means financial activities that provide funding to businesses or companies focused on environmental protection and climate change response. It goes beyond simple investment or loans and plays an important role in promoting transition to a sustainable economy.

This is characterized by giving priority funding to areas that have positive environmental impact, such as renewable energy, electric cars, energy efficiency, and eco-friendly technology development. The government and financial institutions actively support eco-friendly activities of companies and individuals through various methods like issuing green bonds, low-interest loans, and guarantee support.

💡 Why is it important?

• It is an essential financial tool for responding to climate change and achieving carbon neutrality goals.
• It creates economic effects through growth of eco-friendly industries and job creation.
• It leads to real change by economically supporting environment-friendly choices of individuals and companies.
• It is a key tool that supports the transition to a sustainable future economic structure from a financial perspective.

2️⃣ Background and Content of Government Green Finance Policy Expansion

📕 Major Changes in the 2026 Budget Plan

• Green finance investment scale is greatly expanded. Major changes are as follows:

  • It increased from 7.7 trillion won in 2025 to 8.6 trillion won in 2026, about 12% increase.
  • This is a significant scale equivalent to about 13% of the total government budget.
  • Policy finance support for eco-friendly startups and small businesses increases greatly.
  • Green technology R&D investment and infrastructure construction budgets are also expanded.

• Support for promoting electric car distribution is strengthened. Major contents are as follows:

  • A new 1 million won additional support is introduced when purchasing electric cars after scrapping gas cars.
  • Combined with the existing 3 million won electric car purchase subsidy, you can receive up to 4 million won in support.
  • The budget for expanding electric car charging infrastructure also increases significantly.
  • Customized support plans by region and car type are introduced in detail.

📕 Expanding Investment in Environment and Safety Areas

• Climate disaster response capabilities are greatly strengthened. Major areas are as follows:

  • Invest in infrastructure construction to prepare for extreme climate phenomena like floods, droughts, and heat waves.
  • Focus budget allocation on early warning systems and disaster prevention technology development.
  • Build customized response systems prioritizing vulnerable groups and vulnerable areas.
  • Plan to actively participate in building international climate disaster cooperation systems.

• Investment for solving environmental pollution also increases. Major contents are as follows:

  • Invest in water quality management technology development to solve green algae and red tide phenomena.
  • Work on introducing advanced technology and expanding personnel for forest fire prevention and early suppression.
  • Promote comprehensive measures for fine dust reduction and air quality improvement.
  • Support building a circular economy through improved waste treatment and recycling technology.

💡 Major Goals of Green Finance Expansion

1. Achieving Carbon Neutrality: Playing a key role as a core means for achieving the 2050 carbon neutrality goal
2. Fostering Eco-friendly Industries: Supporting competitiveness enhancement of green technology and eco-friendly companies
3. Job Creation: Creating employment effects through expansion of green jobs
4. Economic Transition: Transforming existing industrial structures in sustainable directions
5. International Competitiveness: Securing competitiveness matching global ESG trends

3️⃣ Major Areas and Expected Effects of Green Finance

✅ Core Investment Areas and Support Methods

• Renewable energy is the top priority investment target. Major areas are as follows:

  • Support construction of new renewable energy power generation facilities like solar, wind, and hydrogen.
  • Also expand investment in Energy Storage Systems (ESS) and smart grid construction.
  • Provide low-interest loans for installing solar panels in private homes and buildings.
  • Actively support renewable energy development projects suitable for regional characteristics.

• Investment for building eco-friendly transportation systems increases. Major contents are as follows:

  • Support conversion of commercial vehicles like electric buses and electric trucks, not just electric cars.
  • Expand infrastructure investment for hydrogen car distribution and hydrogen charging station expansion.
  • Build eco-friendly transportation networks through bicycle roads and public transportation improvement.
  • Also strengthen company support for eco-friendly conversion of logistics systems.

✅ Economic Effects and Industrial Ecosystem Changes

• New job creation effects are expected. Major areas are as follows:

  • Technical jobs related to renewable energy installation, maintenance, and operation increase.
  • Employment expands in electric car manufacturing, battery production, and charging infrastructure construction.
  • New job types like environmental consulting and green finance specialists are emerging.
  • Retraining and job transition support also increases during the eco-friendly conversion process of existing industries.

• Company competitiveness enhancement and investment attraction effects also appear. Major changes are as follows:

  • Company sustainability increases through ESG management and global competitiveness improves.
  • Funding conditions for startups with eco-friendly technology improve.
  • Foreign investment attraction effects are expected due to increased interest from overseas investors.
  • Future regulatory risks can be reduced through proactive eco-friendly conversion.

4️⃣ Related Terms Explanation

🔎 Green Bonds

• Green bonds are special-purpose bonds issued for environmentally friendly projects.
  • Green Bonds are bonds issued specifically for use in projects that have positive environmental impact, such as climate change response, biodiversity conservation, and pollution prevention. They have been spreading worldwide since the European Investment Bank first issued them in 2007.
  • Major characteristics of green bonds include: First, raised funds must be used only for environmental projects. Second, fund usage and performance must be transparently disclosed. Third, they must receive green certification from third-party organizations. Fourth, they are often issued at relatively lower interest rates compared to general bonds.
  • In Korea, the green bond market began forming in earnest from 2019, with active participation from the government, public enterprises, and private companies. In the 2026 budget plan, the government also plans to expand the scale of green bonds it issues to invest in renewable energy, electric car infrastructure, and eco-friendly buildings.

🔎 ESG Investment

• ESG investment is a sustainable investment method that considers environment, society, and governance.
  • ESG investment means making investment decisions by comprehensively evaluating Environment, Social, and Governance factors. It is characterized by considering company sustainability and social value together, beyond simple financial profitability.
  • Looking at each ESG element: First, Environment (E) evaluates climate change response, resource efficiency, pollutant emissions, biodiversity conservation, etc. Second, Social (S) considers worker rights, community contribution, customer satisfaction, supply chain management, etc. Third, Governance (G) includes board independence, shareholder rights protection, corruption prevention, transparent management, etc.
  • Recently, major global investment institutions are expanding ESG investment, and Korean financial authorities are also gradually promoting mandatory ESG disclosure. Green finance is an investment method specialized in the Environment (E) element of ESG and is expected to become more important in the future.

🔎 Carbon Neutrality

• Carbon neutrality means making net emissions zero by equalizing greenhouse gas emissions and absorption.
  • Carbon Neutrality means minimizing greenhouse gas emissions from human activities as much as possible, and absorbing remaining greenhouse gases through forest creation and carbon capture technology to make net emissions zero. It is also called Net Zero.
  • Major methods for achieving carbon neutrality include: First, reducing greenhouse gas emissions through energy efficiency improvement. Second, reducing fossil fuel use through conversion to renewable energy. Third, expanding eco-friendly transportation like electric cars and hydrogen cars. Fourth, utilizing forest restoration and carbon capture and storage technology.
  • Korea declared "2050 Carbon Neutrality" in 2020 and is promoting specific scenarios and policies to achieve this. Green finance plays an important role as a key means for achieving carbon neutrality goals by facilitating private capital flow into eco-friendly sectors.

5️⃣ Frequently Asked Questions (FAQ)

Q: Can individuals also receive green finance benefits?

A: You can receive various individual green finance products and policy support.

• There are several green finance benefits that individuals can receive. First, when purchasing electric cars, you can receive government subsidies and low-interest loans, and from 2026, you can receive an additional 1 million won when scrapping gas cars. Second, when installing solar panels in homes, you can receive low-interest loans and installation cost support. Third, tax benefits and loan support are available when doing eco-friendly remodeling or purchasing high-efficiency appliances. Fourth, you can earn profits while contributing to environmental protection by investing in green bonds or ESG funds.
• Banks are also increasingly offering green finance products for individual customers. Representative examples include eco-friendly car loans, solar panel installation loans, and ESG savings accounts, which often provide lower interest rates or preferential benefits compared to general financial products.

Q: Does green finance help economic growth?

A: It is essential investment for long-term sustainable economic growth.

• Green finance brings definite economic effects in the long term, although it requires conversion costs in the short term. First, jobs are created through growth of new industrial sectors. High-value jobs are increasing in renewable energy, electric cars, and eco-friendly technology fields. Second, it increases national economic stability by reducing energy import dependence. When the proportion of domestic energy like solar and wind power increases, overseas energy import costs can be saved. Third, social costs from environmental pollution decrease. Medical costs and disaster recovery costs from air pollution and climate disasters can be greatly saved.
• Internationally, green finance is also recognized as a key element of future competitiveness. As environmental regulations like the EU's Carbon Border Adjustment Mechanism (CBAM) strengthen, companies and countries slow in eco-friendly conversion may become disadvantaged, making proactive investment necessary.

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