As instability in the global energy market continues amid the war between the United States and Iran, a report has argued that actively supporting corporate facility transition is essential to fundamentally address recurring energy crises. The argument holds that short-term measures to stabilize oil prices alone cannot resolve the vulnerability of an industrial structure heavily dependent on oil, and that the government must back decarbonization facility investment and industrial transition.
The Federation of Korean Industries (FKI) said on the 6th, through a report titled "Overseas Energy Crisis Response Policies and Implications" commissioned to Kim Jin-soo, a professor in the Department of Earth Resources and Environmental Engineering at Hanyang University, that "major countries are pursuing energy efficiency improvements and industrial structure transition policies alongside price stabilization measures to respond to the energy crisis."
The report emphasized the need to utilize the four pillars of energy crisis response presented by the International Energy Agency (IEA): curbing demand, using strategic petroleum reserves, increasing production, and fuel switching. In particular, it analyzed that from a long-term perspective, structural transition to reduce oil consumption and maintain industrial competitiveness is important.
Currently, Korean industry has a high proportion of energy-intensive sectors such as petrochemicals and steel, making it vulnerable to international oil price fluctuations and supply chain shocks. During past global energy crises such as the oil shocks, the Gulf War, and the Russia-Ukraine war, corporate cost burdens surged sharply. But once each crisis passed, the pattern of focusing on short-term measures rather than fundamental responses has repeated.
To overcome such limitations, the report proposed first strengthening support for decarbonization facility transition. Because enormous initial investment costs arise when companies convert existing fossil fuel-based facilities to eco-friendly ones, tax benefits and subsidy support should be expanded, it said.
The European Union (EU) introduced the Clean Industrial State Aid Framework (CISAF) to reduce energy dependence after the Russia-Ukraine war, supporting investment in eco-friendly industries such as batteries, solar power, and carbon capture, utilization and storage (CCUS). In particular, it supports a significant portion of the costs of converting low-carbon fuel production facilities, lowering companies' industrial transition burdens.
By contrast, in Korea, some sectors such as petrochemical feedstock conversion facilities are excluded from tax support, leaving companies to bear conversion costs on their own. Referring to the European case, the report said Korea should consider applying tax credits at the level of new growth and source technologies to eco-friendly feedstock production facilities such as e-naphtha (artificial synthetic naphtha combining carbon dioxide and hydrogen) and bio-naphtha.
The report also pointed out that the support system for energy-intensive industries needs improvement. Petrochemicals and steel play important roles in the national economy, but their global competitiveness could weaken due to high energy costs. After energy prices surged, the United Kingdom has operated permanent support policies including electricity grid usage fee refunds and exemptions from renewable energy levies to maintain industrial competitiveness.
Korea, too, should shift its policy beyond simple financial support toward inducing energy efficiency improvements and facility innovation, the analysis said. Current domestic support systems remain limited to providing low-interest loans on the premise of achieving a certain level of energy efficiency improvement, which is insufficient to drive large-scale corporate facility transition.
Experts stressed that attention must be paid to the fact that the energy crisis is not a temporary problem but a recurring structural risk. While strategic petroleum reserve releases and price stabilization policies are needed in the short term, in the long term the government must create an investment environment that allows companies to transition to energy-efficient production systems, they explained.
Kwon Hyuk-min, head of FKI's Growth Strategy Office, said, "The energy supply crisis is highly likely to recur in the future," adding, "Through mid- to long-term responses such as facility transition support, we must gradually restructure the oil-dependent industrial structure and secure future competitiveness."
