On March 19, it was reported that the Korean government, while lowering sales tax, would substantially reduce the cost of importing LNG, making its tax amount lower than that of coal, in order to encourage people to switch to cleaner fuels in order to face the worsening air pollution.
| Azodicarbonamide (AC foaming Agent) |
Korea’s Ministry of Trade, Industry and Energy has proposed to reduce the surcharge on LNG imported fuel for power generation from the current 24.2 won ($0.02) per kilogram to 3.8 won. The revised tax law will come into force on April 1.
This is expected to boost the use of liquefied natural gas. So far, LNG taxation has been higher than fossil fuels.
Because of its low emission, the environmental cost of LNG is half that of bituminous coal. But the total tax, including special consumption tax, import surcharge tax and customs duty, is 91.4 won, more than twice the 36 won of bituminous coal.
After the special tax exemption in July last year, the reduction of import surcharge of liquefied natural gas will raise the total levy of liquefied natural gas from 23 won to 91.4 won, while the Levy of power coal will rise from 36 won to 46 won.
| EDTA |
The government estimates that the new tax will help reduce 427 tons of ultrafine particulate matter per year. Ultrafine particulates are small dust particles with diameter less than 2.5 microns, which are directly absorbed into the blood and pose serious health risks.
LNG used in thermal power plants or cogeneration plants will enjoy full tax rebate, because its energy efficiency is significantly improved, about 30 percentage points higher than that of traditional power plants. From April 1, enterprises with installed capacity of less than 100 MW will reduce tax by 6.9%.
At present, 40% of South Korea’s electricity supply depends on coal. Liquefied natural gas accounts for less than 20%. Nuclear reactors account for 30% and renewable energy sources such as solar, wind and fuel cells account for about 10%.
| Melamine |