From 2022, in a move being seen by some as an indication of Seoul admitting it has fallen behind in efforts to dominate regional energy trade, South Korea will start to offer tax rebates for shipping firms looking for an LNG bunkering base in north east Asia.
To achieve its goal, South Korea’s Democratic Party led government has already revised domestic legislation on existing tariffs according to local government officials.
At present LNG imported and earmarked for vessel use faces a surcharge of US$0.02 per kg (24.2 won) tacked on to a 3% charge imposed during the winter months and 2% through the remainder of the year.
As part of the nation’s push to establish itself in this field, Korea Gas Corp (KGC), the state owned entity, has also announced plans to construct a fifth LNG terminal on the Yellow Sea coast in the city of Dangjin.
South Korea’s position on the west coast of the Sea of Japan is paramount in its push towards making itself an LNG bunkering hub, and has been coupled to ongoing efforts at reducing the current LNG consumption tax in a bid to boost hydrogen production, whilst at the same time pushing domestic industry to reduce its coal use.
Image used for illustration purpose only – C: Belt & Road News