The government declared 2050 Carbon Neutral Vision, which brings net carbon emissions to 0 by 2050 to reduce greenhouse gas emissions, the main culprit of climate change.

Meanwhile, many companies in the steel industry, which is categorized to consume a lot of energy, mix iron ore and coal and melt them in a furnace to make steel. They emit a lot of emissions; 2 tons of carbon oxide are generated to make 1 ton of steel. In response, the steel industry is accelerating a hydrogen reductive steelmaking process, which uses hydrogen instead of coal in steelmaking.

However, hydrogen reductive steelmaking costs 60% more than traditional furnace steelmaking and requires a lot of funding for large-scale R&D to develop the required technology, which may take at least 20 years, and establish new steel mills. Hence, multi-faceted support is required. Nevertheless, unlike the US, Europe, and Japan, which already put in place policies to support the development of such technology, Korea abolished tax breaks for investments in energy-saving facilities and provides little support to companies participating in national tasks for carbon neutrality.

In this regard, by providing tax breaks to companies investing in future eco-friendly technology including hydrogen reductive steelmaking, this Act aims to contribute to establishing a national infrastructure to successfully achieve the Green New Deal and 2050 Carbon Neutral Vision and transition into a hydrogen economy (Article 24-2 newly inserted).

Article 24-2