The South Korean government will expand the scope of institutional support for its upcoming special law on climate tech to include large corporations, aiming to accelerate growth of the climate tech industry by embracing businesses of various forms.
According to the government and the venture industry on Monday, the Ministry of Climate, Energy and Environment plans to establish an exception clause allowing companies other than ventures and startups to be covered by the "Special Act on Fostering Climate Technology." Under the special law, climate tech firms are defined as venture-certified companies or businesses founded within the past seven years that operate with technologies related to the climate crisis. Even companies that do not meet these conditions can be included as subjects of the special law if they satisfy government-set criteria.
The decision appears to reflect a judgment that growing the climate tech industry itself should take priority over narrowly targeted support for small businesses. Experts have long warned that focusing solely on startup support could undermine the fundamental goal of carbon reduction.
The Special Act on Fostering Climate Technology is one of the 123 national policy tasks of the Lee Jae-myung administration and a flagship initiative of the current Climate Ministry. The main purpose of enacting the special law is to identify new industries that can simultaneously contribute to addressing the climate crisis and driving economic growth. Companies benefiting from the special law will be eligible for various regulatory sandboxes and financial support. The government's decision to create a special law reflects its intention to anchor policy grounds in legislation and secure long-term momentum for responding to the climate crisis.
As the government has decided not to impose size limits on eligible companies, large corporations and mid-sized firms will effectively have a path to receive benefits under the special law. The Climate Ministry plans to first announce the special law in the first half of this year and subsequently set the criteria for applying the law to general companies through an enforcement decree.
A method for large and mid-sized companies to indirectly receive support under the special law through consortium formation will also be established. The Climate Ministry plans to include a "strategic business support" clause in the special law. The clause would allow a consortium of multiple companies formed to pursue a specific business to be covered by the special law. This can also be interpreted as a commitment to fostering innovative businesses without being bound by company size.
"In climate tech areas such as infrastructure or deep tech that require large-scale capital, large corporations clearly have a role to play," said Jung Su-jong, a professor at Seoul National University's Graduate School of Environmental Studies. "In growing the climate tech industry, reverse discrimination based on company size must not occur."
